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andybarton

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The good news is it's new investment.

 

The bad news is, IMHO, they will be looking for the maximum return on their investment, most likely above all else, whatever that means for the business as we know it today. It's not too difficult to imagine an outside investor wanting to maximize the brand, so maybe we will see many more cheap Leica branded digicams down the line.

 

I would suggest that a stronger wind of change will be blowing through Solms in the coming years. Is this part of an exit strategy by Dr Kauffman?

Edited by earleygallery
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They went through different storms in the past, hopefully there it is only some wind

to come and no stony blackurricanes.

 

Black grasshoppers, the bad news is: >40% is quite a lot. And there are many

more dollars floating around searching for shares.

 

 

 

Best

GEORG

Edited by k_g_wolf
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German-language report: Auf zu neuen Ufern: Blackstone steigt bei Leica ein - n-tv.de

 

If I read this right, Dr Kaufmann required a cash investment, no credit or other instruments. And the price he got seems to be above current market value. Very canny guy (obviously, to have made his fortune ;) ).

Edited by ho_co
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I think this is a move to re-establish the regular listing of Leica stock, which today is listed only "in theory" (the floating shares are a ridicolusly low %) : is a typical biz of entities like Blackstone... buy "privately", show some quarters of good Company results, "float" in the stock market with a good return: a strategy that can work well if managed with care... I think that the future statements of Leica quarterly results will have to be read with close attention.

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My best guess is that this will increase the likelyhood of a redsign of the M platform aiming at redusing production cost and increasing volumes.

 

If this is good or bad is a different issue.

 

Anyway, it will be naive to think that Blackstone don't have any thought on how to reshape Leica and / or its product line to create shareholder benefits.

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I wonder if this is Dr. Kaufmann's means of getting the money necessary to build the new Leica facility? At the recent LHSA meeting in Pittsburgh PA he said that the development of the Leica facility was delayed in order to redesign it and make it larger. That effort is to be concluded by the end of next month I believe. He said that he went to a bank for a loan and the bank said "Fine, so long as you give us the same amount as collateral" (I'm paraphrasing). So maybe this is construction money...

 

Bruce

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Blackstone clearly liked the turnaround in results this year over last, and probably likes the management team and product lineup that achieved these results.

 

The Kaufmann family likely thought that selling some of the company is a good way to get some diversification of their assets, while maintaining the management control that has added so much value since the problems of the mid 2000s.

 

It is not clear what value a private equity company can bring to the operations. I doubt that Blackstone has any lens designers who are very competent.

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It's likely Dr Kaufmann will have done well out of his investment. Figures are not being disclosed but it seems unlikely he got less for the 44% they've bought than he paid for the whole company originally.

 

Good news for investment of course, bad news because, as James says, they will milk the brand for what they can get and it remains to be seen whether they can refrain from transatlantic meddling. The statement that ACM does not intend to sell any shares and the comfort words from Blackstone are there to reassure but it's easy to see a conflict between excellence and the quick buck.

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