The Celtics may be exploring a buy-back of publicly held
units in the Boston Celtics Limited Partnership in a bid to take
the company private again, according to Joan Vennochi in this
morning's BOSTON GLOBE. The "goal would be to make even more
millions for the team owners as well as protect them from the
scrutiny that goes along with public filings." As reported in a
FINANCIAL WORLD piece, the reason to suspect such a move is the
possibility that the Celtics could lose their master limited
parntership (MLP) tax advantage at the end of '97 due to changes
in the law. At that point, the general partners would have to
pay taxes on earnings at the corporate rate of 35%. However,
there is a proposal before Congress to preserve the MLPs' favored
tax status, which probably would cause the stock to go up.
Vennochi: "In other words, there is now an ideal window of
opporutnity to buy the stock as cheaply as possible and then lock
in more of the Celtics profits, which wouldn't have to be
distributed to shareholders." Celtics CFO Joseph DiLorenzo said
the team "really hasn't talked about" a buyback, but added that,
generally, "it makes "100% sense to do it when the stock is
undervalued" (BOSTON GLOBE, 5/10).
