Corporations have the upper hand over private equity firms in acquisitions for the first time in years because of chaos in the debt markets, the Wall Street Journal reports. Private equity firms are stalled until the credit situation stabilizes and they can sell off some of their debt. Corporate buyers have no such burden and can offer cash, stock or both.
The Journal cites several major deals already affected by the reversal. Comcast, Time Warner or Liberty Media may end up outbidding private-equity giant Carlyle for the British cable operator Virgin Media. Cadbury Schweppes postponed the $15 billion sale of its U.S. soft-drink business because private-equity bidders are having trouble securing financing.