Wednesday, December 06, 2006

Citigroup Said Deere (DE) Approached by Private Equity

Citigroup analyst, David Raso, comments on meeting with Deere & Co (NYSE: DE) management: "Discussion focused mostly on potential areas for acquisitions/business build outs given hugely strong balance sheet and on the sustainability of its strongly improving Shareholder Value Add metrics. However, some interesting color included CEO answering our questions acknowledging company has been approached by private equity to buy the company though management seemed to genuinely dismiss the potential for such an event."

"As well, somewhat disappointing when it comes to accounting earnings potential over the next 24 months is when we asked mgmt about its journey to continually reduce inventory in the channel and if production could stay below retail demand, mgmt noted that's possible."

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