bjakes00

I'll be interested to see if BAM screw minorities in this again how they ever come back to the market with IPOs...they are going to have to hope for a ton of trade sales in the future. Or maybe the market has a short memory. Additionally, I'm amazed Guy Spier wasn't able to talk Mohnish out of this after Guy got burnt in the TOO saga...BAM are extremely unfriendly majority shareholders - do not invest alongside these guys, ever!

Agreed. I would like to go into the illiquid units alongside them, but am worried about being ‘outmatched’ somewhere along the line. A reputation of fairplay with minorities would be a far better place to be. Do we have any other precedents of Brookfield enticing minorities into the illiquid units and screwing them?

I’m intrigued why the CEO hasn’t been buying more? Great that the CIO is, but interesting that the dynamic CEO and ex-CFO duo haven’t been loading up if their case is so rock solid.

They appear to use this attorney / client privilege argument whenever it’s convenient for them to do so. Unfortunately, whilst Burford may turn out to be a fantastic business in the long run, there are just too many areas (far more than a normal operating company) where management has discretion to tweak things and hide it under the veil of attorney work privilege or whatever they want to call it. I just don’t have a good answer to “why should I trust management?” In this case. There are too many things they are doing that require an unacceptable level of trust.

(Hopefully I haven't missed a thread elsewhere on the topic) There are many examples of incredible companies that have achieved long term, sustainable success through what some would call "scale economics shared", i.e., a relentless drive to give back to the customer via lower prices and better service as the business scales. Think Costco, Amazon, Southwest Airlines, GEICO, Progressive. I am trying to assemble a list of these companies and was looking to the forum for any additional insight they could provide. I am particularly interested in hearing about relatively young companies whose founders/leaders are pursuing a similar strategy - for example a very small company that is starting out on this path is Majestic Wines (WINE LN - will be called Naked Wines in a few weeks).

Also how did the value of the equity halve in the 18 months since their initial acquisition when all the metrics have improved? How can any independent committee recommend this deal when there was a line drawn in the sand with the initial purchase? The 20%+ minority shareholders should sue till the cows come home on this one.

Gregmal, agreed BUT this is not a long term winning strategy. Ultimately these scoundrels depend, to some degree, on the public markets and if they continue to screw minority shareholders there are major reputational issues at stake. Take the busted IPO of Graftech for example, who wants to invest in a Brookfield IPO when you have precedent that they screw minorities?

Extensive write-up on VIC: https://www.valueinvestorsclub.com/idea/Majestic_Wine_PLC/4417954314

Wanted to flag that it is worth reading the executive compensation part of the annual report. The company is clearly setup for and focused on creating shareholder value. The CEO turned down an increase in salary as growing the value of his stake in the company is far more meaningful in the long run. Additionally he gave up incremental stock based comp so that more of it could be allocated to employees and incentives aligned. Another positive sign.

Fair comment, but what might be worth considering is wouldn't the first steps on the way to the perfect scenario you're envisioning look like the ones they've recently taken? Untangling Naspers is a process. the perfect scenario - at least insofar as i imagine it - is that naspers is able to deploy its capital at double digit+ IRRs (as it has done even when excluding the tencent miracle) while tencent continues to grow. as tencent grows, naspers trims its position and uses proceeds to buy back stock at a significant NAV discount, which augments the NAV/share growth. In my opinion, this is preferable to Naspers simply spinning off the Tencent position (creating a Altaba / Alibaba structure). The NAV discount is an opportunity to create value in an incredibly low risk way. having multiple layers of ownership adds to the complexity, which could lead to the discount persisting, though as mentioned above, the new listing hopefully creates new demand for the holding company, which should help the discount [there are puts and takes to this step, but i agree (/hope) that it should be a net-benefit]. i'd like to see executive compensation tied to narrowing the discount in some fashion. they should not continue to get paid based on what tencent does (ie yesteryear's grandslam) If I could, I’d upvote this comment. I couldn’t agree more (and apologies for the low value add comment in advance)

I am a subscriber and know many friends that are subscribers and use the service on a regular basis. Anecdotally, I have my in-laws in town and they couldn’t believe the diversity of wines I have from Naked (country-wise and quality-wise). I know you could buy wines from all over the world from your local store but I see the value in getting more customers onto the platform that can fund great wine makers who can provide decent-quality wine at a good price. In any event, I don’t think it’s easy to replicate that dynamic (especially the good winemakers and community). However, I would like to see them being selective in acquiring customers, as in they shouldn’t be offering customers £100 vouchers that end up coming to the platform via word of mouth!

Naked is clearly the better business with the better long term opportunities and I totally agree that the self-reinforcing effects of more customers = better winemakers = broader range of offering = better customer proposition are evident. It makes you question why the merger was done in the first place but hoping management have a good idea of what they'll do with the Majestic retail footprint to leverage the Naked platform. It has the hallmarks of a business that has an identified an interesting reinvestment opportunity and is now throwing the kitchen sink at it - its clearly a concentrated bet that they believe in. On the flip-side it seems that Protector Forsikring is slowly throwing the towel in on their position - they've decreased their holding from 6.1% to 4.3% over the past two days from reg filings (and we probably won't see from here how much further they are decreasing it). Keen to hear other peoples thoughts? I note that Constellation Software bought a company that is involved in the retail wine sector: https://www.jonassoftware.com/About_Us/Latest_News/Jonas_Software_Acquires_WineFetch,_Inc

Not sure the buyer would be the company itself again - they desperately need to get more liquidity in the market. Also would be happy if the company bought some of it but hopefully a large chunk goes to the market. Interesting that they are willing to transact at this price but it might be BAM recognising that the stock is held back by liquidity. I saw something similar happen with OEC IPO in 2014 and the follow ons - i.e., as soon as they got enough liquidity going the stock was able to start moving more "freely".

They haven’t officially changed their minds, it was the price they seemed willing to transact at post the IPO. There won’t be any buybacks until the share price can get back there again. In any case they’ve committed $100m now to paying down debt which seems prudent.

Agreed except it’s only dividends until the stock gets back above $20. Brookfield have a clear view of the intrinsic value of this one (unless that has changed on their side with a different view of the GE / Needle Coke price outlook)