Thursday, February 22, 2007 this stock move

it´s maybe time not to put fingers on google to describe this market as frothy. just look at the market action when vulcan bought florida rock.

man braucht um den täglichen hype zu erkennen keine finger mehr auf google zu richten. hier ein beispiel aus der baubranche.

1)the news
Vulcan Agrees to Buy Florida Rock for $4.6 Billion

Vulcan Materials Co., the biggest U.S. producer of highway construction materials, will acquire Florida Rock Industries Inc. for $4.6 billion to add gravel reserves and concrete-making capability in southeast states.

Florida Rock shareholders will receive cash and stock valued at $68.03 a share, 45 percent higher than the closing price on Feb. 16, Birmingham, Alabama-based Vulcan said in a statement yesterday. The payment will be 70 percent in cash.

Vulcan is offering an ``unprecedented'' 12.6 times Florida Rock's projected 2007 earnings before interest, taxes, depreciation and amortization, ABN's Roger said.

``I realize that a premium of this size is at the higher end of industry comparisons,'' Vulcan Chief Executive Officer Donald James, 64, said on a conference call today. ``Great companies and great opportunities don't come cheap. Florida Rock is well managed, is in high growth markets and has superior long-term assets and reserves.''

Standard & Poor's Ratings Services today lowered its corporate credit rating on Vulcan to A- from A+, and placed the ratings on review for a possible downgrade. Vulcan will issue $3.2 billion in new debt for the purchase, James said, bringing total debt to $3.7 billion, or a debt-to-capital ratio of 51 percent.

Vulcan will lower its debt-to-capital ratio to 35 percent to 40 percent within three years and intends to maintain an investment grade rating, he said

2) the facts:

vulcan pays a 46% premium ( lifts florida rock to an all time high) / 46% aufschlag neues ath für frk

i neglect the debt issue this time. ( a ratings are rare these days) / rating immer noch gut

they pay a record multiple to get florida rock / rekordbewertung bezahlt

mhhhhh, now lets take a look what is so great about frk.

zeit sich das übernamheobjekt etwas genauer anzusehen.

􀂉One of the Nation’s largest producers of aggregates.

􀂉Major supplier of Ready Mix Concrete in Florida, south Georgia, Virginia and Maryland (Ranked #1 or #2 in most markets).

􀂉Major Florida cement supplier through Newberry Cement Plant and two import terminals.

65% of sales are in florida!

with 45% tied directly to residential building!

3)the stock market reaction!

buying a company that is mainly dependent on the florida real estate market! with a 46% premium would lead me to the conclusion to sell vulcan shares.

but surprise, surprise... vulcan shares spiked almost 15%! to an all time high!

da wird also ne firma gekauft die zu über fast 50% vom immobilienmarkt in florida abhängt. dazu wird noch ne fast 50% prämie gezahlt. ich würde meine vulcan aktien sofort vertickern.

überflüssig zu erwähnen das vulcan aktien bis zu 15% gestiegen sind und ein neues allzeithoch erreicht haben.

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