asset-stripper


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asset-stripper

a predator firm which takes control of another firm (see TAKEOVER) with a view to selling off that firm's ASSETS, wholly or in part, for financial gain rather than continuing the firm as an ongoing business.

The classical recipe for asset-stripping arises when the realizable MARKET VALUE of the firm's assets is much greater than what it would cost the predator to buy the firm; i.e., where there is a marked discrepancy between the asset-backing per share of the target firm and the price per share required to take the firm over. This discrepancy usually results from a combination of two factors:

  1. gross under-valuation of the firm's assets in the BALANCE SHEET;
  2. mismanagement or bad luck resulting in low profits or losses, both of which serve to depress the firm's share price.

asset-stripper

a predator firm that takes control of another firm (see TAKEOVER) with a view to selling off that firm's ASSETS, wholly or in part, for financial gain rather than continuing the firm as an ongoing business.

The classical recipe for asset-stripping arises when the realizable market value of the firm's assets are much greater than what it would cost the predator to buy the firm; i.e. where there is a marked discrepancy between the asset-backing per share of the target firm and the price per share required to take the firm over. This discrepancy usually results from a combination of two factors:

  1. gross undervaluation of the firm's assets in the BALANCE SHEET;
  2. mismanagement or bad luck, resulting in low profits or losses, both of which serve to depress the firm's share price.
References in periodicals archive ?
For six months I have negotiated with Russian owners, Malaysian investors, Swedish managers, British bankers and now agents for Chinese asset-strippers.
FORMER Jaguar boss MP Geoffrey Robinson is hoping asset-strippers don't move in to buy the luxury car maker.
Private equity companies, which last year were responsible for one fifth of last year's pounds l,900bn-worth of mergers and acquisition, have come under the spotlight recently with unions condemning them as corporate raiders or asset-strippers, only interested in quick profits.
VILLA's pounds 7 million land sale this week was done to deter asset-strippers from taking over Doug Ellis's empire - and encourage buyers who have football as their No.
The team who will attempt to find a buyer should not treat the exercise as a fire sale and should protect these great Welsh facilities from asset-strippers.
Enough of the warmongers and the job-cutters, enough of the asset-strippers and the mortgage-flippers, enough of the welfare-bashers and the bedroom-taxers.
The short-sellers, the hedgefunders, the asset-strippers.
Against that background, it would be foolish to dismiss them as mere asset-strippers.
With his associate Lord White he was an icon of 1980s capitalism, becoming one of the most feared asset-strippers on either side of the Atlantic.
VER since they acquired Littlewoods in October 2002, I have heard a lot of talk that the Barclay brothers are asset-strippers.
Britain was being run, or rather ripped off, by a bunch of buccaneering asset-strippers with a few things in common: greed, ruthlessness and membership of the Clermont Club in Mayfair.
Private equity houses - innovative businesses which create jobs and prosperity or ruthless asset-strippers filling their pockets at the expense of the workers?