Rail America -- what is Fortress thinking?
Author: TMRail
Date: 11-19-2006 - 15:18
Hipshot Wrote:
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> Once the bidding starts, the sum of the separate
> part values will be significantly greater than the
> price paid for the whole.
The problem with the idea of Fortress making their money back through asset sales is that there aren't very many buyers out there. Genesee & Wyoming has a lot of cash from the sale of Australian Railroad Group but they've been an extremely disciplined buyer of short lines and industrials. I suspect that it will be hard for Fortress to get any kind of premium out of GWR for RailAmerica's assets.
Watco is another potential buyer but I suspect that they don't have GWR's deep pockets. Ditto for OmniTrax. I'm not sure how many other privately-held short line/regional operators are out there, but not too many, I suspect.
Tom Murray