David Rosenthal: belief

Transcript context

…At the end of the day, Price Club was either going to land with Walmart or with Costco. Sol Price didn't want it to be Walmart and very, very much wanted to join forces with Jim Sinegal, so they made that happen. This was the natural successor for this combined business in Jim Sinegal. Interestingly, the transaction really is about as close to a merger of equals as I think we've ever seen on the show, with the caveat that Jim is clearly going to be the CEO that's going to run the combined company. At the transaction, 52% of the equity in the combined company goes to Costco shareholders, 48% to Price Club shareholders. They're about the same size, about a hundred stores each at the time of the transaction. But Costco is growing way faster, so had they just waited a couple of years, the balance of favor would have been way far in the Costco side of things. Yeah. You get the sense that the Costco folks were being very respectful of the Price Club folks, because I believe it was something like a 30%-plus premium paid for Price Club stock. I think everyone is looking at each other and Costco, knowing that they could really buy Price Club for a much smaller relative percentage in the future, but why don't we just do this today? I know it's a good deal for Price Club folks. Let's just say, pseudo merger of equals, let's call it, and let's be one team from now on.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.