Bn Takeover: Acquisitions Lens and Interest Costs

bn takeover: The CBI skips over the fact that the companies on Labour's list generate profits and cash, according to The Guardian. Viewed through a pure mergers and acquisitions lens, one could even regard a 200bn takeover as cashflow-enhancing for the state since the CBI itself puts the additional interest costs at 2bn, a sum that might be covered comfortably by the newly acquired companies. Of all the arguments against nationalisation and there are many strong ones the claimed upfront cost is the weakest. Severn Trent and United Utilities made post-tax profits between them of almost 700m last year, and they are only two of 10 major water companies. For example why should postal workers at Royal Mail, who were gifted a few shares during privatisation at 330p, be expected to sell their stakes to the state at less than market value currently 213p if their employer is judged to have asset-stripped the company by flogging a few unwanted depots How could that be fair If employee shareholders would be protected, as Labour has sometimes hinted, why not ordinary savers via their pension funds Not every part-owner of a utility is a sovereign wealth fund. The CBI would be better advised to aim its fire in other directions the fairness and legality of paying less than market price, the effect on foreign investment, and so on. (news.financializer.com). As reported in the news.