Kerry Packer famously sold the Nine Network for $1 billion to Alan Bond in the mid 80's, to only buy it back for half that price a few years later. So the question today is whether history is about to repeat itself, as the network teeters on the edge of bankruptcy. There hasn't been a great deal of news about this in the mainstream press, but D-Day for the famous network is fast approaching with a stand-off looming between investment banks and hedge funds.
As Malcolm Maiden reports in The Age, there is no guarantee that the lenders will get a deal done and it is a stark reminder of how private equity deals can go bad. In fact in the most famous deal of them all, immortalised in the novel Barbarians at the Gate, the leveraged buyout of RJR Nabisco ended up fizzling out, ironically to the Apollo group who are involved in the Nine debt.
If you would like to read more about some of the biggest deals and where they are now, check out this great article from Dealbook.
Speaking of debt, the recent announcement by the U.S. Fed and the E.C.B that they will effectively resort to printing money to buy debt has again put the spotlight on the scale of the problem at hand. Our Director of Wealth Management, Daniel Minihan, has recently written a number of pieces on his blog with some interesting charts to match. Take for example this article on the debt encircling Europe that totals $550 billion which falls due over the next 4 years. Perhaps even more alarming was the post showing Italian debt approaching 123% of GDP which is nearing the same levels of Greece, albeit in an economy 7 times the size and the fourth largest in Europe.
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