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Author: jeffcrawford Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 54  
Subject: Re: Dead Board? Date: 8/13/2000 12:41 AM
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the buyout/acquisition target question is a good one. i've pondered it before, because i think gdys is a good target, if for no other reason than they are pretty undervalued (stock price) by most any metric.

one thing i see working against this is would they sell? i'm not sure, and i think it gets back to the family ownership thing. of course, there is a price that everything is for sell i suppose, but it may not be one that is appealing to an outside interest. i havent checked insider sales in some time, so i'm really not current on where the family stands with regard to ownership percentages, etc...

another thing that i've wondered about these beaten down stocks...some of them might consider repurchasing stock and going private again. if the directors felt that margins would significantly grow, and if their cash position was great, this might be a consideration...even if they had to leverage it through junk bonds or the like.

the other thing i question is, what does gdys have that someone else would want, besides if the financials make sense...in other words, looking forward, how could dynamics of their business act as a catalyst to the acquiring party to grow earnings, create synergy, etc....

with regard to that question, the things that i feel gdys would offer someone is limited to their distribution and market presence, and thought they do make a good buck, geographically a little limited. for example, they are primarily located across the southeast, so they dont have national appeal like the gap, tommy, a & f, etc.....

however, if there were say companies similar to gdys, but a good bit larger, then that sounds like someone who might be compelled to make a purchase. of the five geographic regions of the country, gdys occupies one. if there was a bigger version of gdys that occupied say 3 of the other regions, and wanted to establish an immediate presence in the southeast - gdys would be a good way to do that IMHO.

just a few thoughts, but it is a good question. one final thought, the appearel retail sector is kind of beaten down as a whole right now, so it might be difficult to find a good fit for a 'stock swap' that worked for all...meaning the acquiring party might have to be VERY cash rich with current market valuations.
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