It is the time of the year when market observers put forth predictions for the New Year. Former hedge-fund manager turned entrepreneur turned financial talk-show host Jim Cramer has identified 16 companies he thinks are likely to be acquired in his "Bottom Line" column in New York Magazine. As a service to our readers who may not want to wade through some of the obligatory explanations of private equity necessary in a mass-market publication, Dealscape has compiled a simple listing of the companies broken down by the basic reasons why Cramer believes them to be in play.
Political: Cramer suggests that airlines, energy, healthcare and telecom are industries that the Democrats will try to regulate — especially if a Dem wins the White House in 2008. Consequently, any acquirer will want to act ahead of legislative changes putting these companies in play:
Qwest, Bristol-Myers Squibb, ConocoPhillips, UnitedHealth, and Humana. As a bonus, Cramer puts forth two pairings in the airline sector: United and Continental, as well as US Airways and Delta.
Undervalued: Cramer believes that the growth of private equity will drive undervalued companies to seek refuge from the public markets: Hershey, Barnes & Noble, Applebee’s, and KB Home.
Weak dollar: Cramer believes that the weak U.S. dollar will prompt foreign companies — mainly Europeans thanks to the Euro's strength — to splurge on U.S. brands namely: U.S. Steel, Alcoa, Colgate-Palmolive, Weyerhaeuser, and Yahoo. —Matthew Wurtzel
See story from New York Magazine
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