Beware Monday Morning Merger Talk

Any random sampling can start with an article by any one of the New York Post writers who brought us the thinly sourced story about Microsoft (MSFT Quote) taking over Yahoo! (YHOO Quote), which lost a lot of investors' money last month.

Today, we have more thin, outdated-sounding talk about Bally Total Fitness (BFTH Quote), the troubled company whose stock tanked horribly on Friday.

With the company headed to bankruptcy court, they were also lucky to be headed into a weekend. Then, presto! An exclusive! With, of course, no dissenting voices.

"No Dumbbells" is the catchy name of this particular Monday morning gem with the sub-headline of: "Private-equity firms weighing bid for Bally." The lede says: "Potential buyers, including private-equity firms, are starting to circle Bally Total Fitness, even though the feeble company is heading into bankruptcy court in about two months, according to people familiar with the company."

People familiar with the company, huh? Like investment bankers looking to pawn the thing off on a dumbbell with a pulse? The next two sentences say as much and really back off the premise that anything real, new and definitive is actually afoot.

While no formal buyout proposals (ah-hah) have been made to Bally's board of directors, sources said private-equity firms, including J.H. Whitney & Co. and Texas Pacific Group, have reached out to investment bankers (more likely, investment banks reached out to private buyout firms) and others to explore a possible buyout or restructuring (big difference) of the nation's largest health club chain before it goes into bankruptcy.