When Short-Sellers Become Fodder for Buyout Firms
Herd-like investors are handing better-informed buyout firms some opportunities on a plate.
The herd of buffalo.
Photographer: Michael Smith/Hulton Archive/Getty Images
Buy low, sell high. It’s a great strategy, so long as someone else is willing to take the other side of the trade. Happily for private equity firms, stock-market investors appear to be more than willing to provide the opportunity.
Blackstone Group LP and Hellman & Friedman have been trying to buy back Scout24 AG, the German classifieds group they took public in 2015. Scout24's market value fell sharply last year after lawmakers suggested that property vendors should pay real estate agents’ commissions instead of passing them on to buyers. Investors freaked out at the uncertainty this created for Scout24’s business model. Yet Blackstone and H&F have been prepared to offer 20 percent more than what investors were willing to pay for the shares in December.