SuperValu up 5% on some sort of speculation....(SVU)
Rumors are flying around today about grocery concern SuperValu (SVU), and that it might be the target of a buyout. While I'm doubtful, trading volume is enormous today, with 13 million shares traded versus a 3 month average of 4.1million...
As for a buyout, I for one don't see how the numbers work out, at least for a private equity debt-financed bid. Even taking their maximum interest coverage of the last 5 years leaves little room to add more debt service to this cash stream.
The company's fixed rate debt schedule shows a lot of principal payments this year and next, that will play a large part in a buyout.