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Walmart Founding Family faces test in Humana acquisition talks



Walmart
Inc.

can be controlled by one of the wealthiest families in the world, but the retailer itself does not have much cash on hand.

The company – famed for running a ruthlessly efficient business that spends neither more than it needs nor much lending – ended fiscal year in January with $ 6.76 billion in cash and short-term investments.

That means if Walmart makes an acquisition of

Humana
Inc.,

it would probably have to borrow tens of billions of dollars ̵

1; or spend millions of shares – which could lower the ownership of the Walton founding family below 50%.

Humana has a market value of $ 37 billion. Walmart could pay nearly $ 50 billion to acquire the company, said Ana Gupte, a healthcare services analyst at Leerink Partners.

Walmart ended his fiscal year with net debt of about $ 39 billion. Amazon.com Inc., Walmart's fast-growing high-spending rival, ended 2017 with more than $ 30 billion in cash and short-term investment and only $ 13 billion in net debt.

The Waltons have retained control of the retailer Das

Sam Walton

Founded in 1962 through its expansion into a global giant with nearly 12,000 stores from Chicago to Chile to China. According to S & P Capital IQ, the family had 1.497 billion shares or 50.5% of outstanding shares as of December 31. Almost all of these shares, 1.416 billion, are held by Walton Enterprises LLC, a private holding company that serves as a family investment vehicle.

The Walton family's share was 38% when the Walmart founder died in 1992, but a series of buybacks in the 2000s increased the share by more than 50%. In recent years, the Waltons have sold shares to hold their shares close to 50% and to fund charitable causes. In April 2015, Walton Enterprises distributed approximately 6% of its stake in a new trust to facilitate such sales.

At more than 50%, the family is exempt from the New York Stock Exchange rules, which require a majority of independent directors, but family members occupy only three of Walmart's eleven seats, including the chairman

Greg Penner,

Who is married to a Walton heir?

Walmart Chief Executive

Doug McMillon

is not a member of the Walton family, but an employee who has risen for over 25 years by the leadership. Mr. McMillon and other senior executives regularly inform family members about their plans and ask them for their opinion on larger steps, according to the persons in charge of the matter.

The family is led by three of Sam Walton's children, Alice, Jim, and Rob, each of whom is one of the richest billionaires in the US, based on their Walmart stakes. Rob, the eldest son, was chairman after his father and still has a seat on the board. Jim's son, Steuart Walton, is the first of Sam Walton's grandchildren to replace his father in 2016.

A Humana deal would be by far the largest acquisition for the Walton family and board, which have resisted previous key structural moves, such as the spin-off of the Sams Club warehouse division from the core retail chain, to people working with are familiar with the matter. In 2016, the Board agreed to pay $ 3 billion in cash and $ 300 million in Walmart shares for Jet.com, the largest purchase of a US e-commerce startup at that time.


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