Filing Flows › Southern (SO) › Takeover & LBO
Is Southern (SO) a takeover target?
A leveraged buyout at today's price plus 30% ($121.34 a share) would return a loss of about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $41.73 a share (−55% against today's $93.34). At $213.3B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 1.7% of companies with its figures were bought within a year (0.34× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $121.34 | today's $93.34 plus 30% |
| × shares | 1,128.0 million | |
| = Equity value | $136.9B | |
| + Debt refinanced | $74.5B | |
| − Cash | $981M | |
| + Other claims | $2.9B | preferred stock, minority interests |
| = Enterprise value | $213.3B | 15.8× EBITDA of $13.5B |
| Fees | $4.3B | 2% of the price |
| New debt | $74.2B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $143.3B | 66% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $32.6B | $14.6B | $5.7B | −$6.0B | $80.2B |
| Year 2 | $34.8B | $15.6B | $6.1B | −$6.4B | $86.6B |
| Year 3 | $36.7B | $16.4B | $6.6B | −$6.9B | $93.5B |
| Year 4 | $38.3B | $17.1B | $7.2B | −$7.3B | $100.8B |
| Year 5 | $39.4B | $17.6B | $7.7B | −$7.8B | $108.6B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 13.5× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $237.3B | |
| − Debt left | $108.6B | |
| = Buyer's equity | $128.7B | |
| Money multiple | 0.90× | on $143.3B put in |
| Buyer's yearly return (IRR) | −2.1% |
Price against return
What the buyer makes at other premiums over today's $93.34; the IRR reaches 20% at $41.73 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $102.67 | 1.1% |
| 20% | $112.01 | −0.6% |
| 30% | $121.34 | −2.1% |
| 40% | $130.68 | −3.5% |
| 50% | $140.01 | −4.8% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $30.2B | |
| EBITDA, last 12 months | $13.5B | 44.7% of revenue |
| Depreciation and amortization | $6.2B | |
| Capital spending | $13.2B | |
| Debt | $74.5B | |
| Cash | $981M | |
| Share price | $93.34 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 15% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Southern would cost about $123.68 a share, $139.5B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $112.01 | $126.3B |
| Median | 32.5% | $123.68 | $139.5B |
| High end (a quarter paid more) | 51.8% | $141.69 | $159.8B |
The odds, from history
Historically 1.7% of companies with its figures were bought within a year (0.34× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Southern's latest quarter
Southern, Q3 2026: revenue $8.8B (+13% year over year), operating margin 33.9%, net earnings $2.0B. The chart follows the revenue to costs, profit and cash.
Questions
Is Southern being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Southern?
A leveraged buyout at today's price plus 30% ($121.34 a share) would return a loss of about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $41.73 a share (−55% against today's $93.34). At $213.3B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Southern cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Southern would cost about $123.68 a share, $139.5B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.