Stubbed out

Why is so hard to make stub equity work? The idea, in theory, sounds appealing. Offering a stub equity option allows bidders to head off suspicions that they are trying to swindle conventional fund managers. That’s one of the reasons why BAA investors asked Ferrovial to include stub equity in its bid, allowing the Spanish group to win the auction. But these same investors have now decided to take the cash and run. The BAA stub is just the latest structure to bite the dust. Philip Green tried an...