wisowis

Just to follow-up on my previous post about the Artis prefs, the option to convert to an open-end trust was approved at the latest shareholder meeting. And in the Q1 earnings call, Samir brings up the redemption of the prefs:

Quickie of an idea, thoughts welcome. Stella-Jones is a Canadian company that has 3 main business segments: Residential lumber - 26% Railway ties - 29% Utility poles - 25% +'s Already in their target leverage range (currently net debt to EBITDA ~2.2x, target range 2-2.5). Last 2 years they've spent their capital on buybacks (historically spent on acquisitions), in addition to their dividend. Repurchases will continue. Valuation at ~10x EV/EVITDA LTM, ~8.3-8.8 NTM based on guidance. Lower end of historical range. Their guide is $450-480 million in EBITDA, on current EV of ~$4 billion. Residential lumber sector has been hot of course. Grew >100% yoy in Q1. Increase was 70% pricing/30% volume. Won't argue whether pricing will come down (several threads discuss this point already), but I think demand will remain high for medium-term. Sales growth was 20% in 2020, guiding 15-20% this year ex-currency headwinds. Railway ties guidance is ~flat y/y, based on announced maintenance programs. This segment is very steady over the long-term. However, there is potentially growth in this sector 12-24 months out. From Q1 call: Utility poles guiding to MSD to HSD growth y/y. Potential optionality again if Biden's infrastructure plan gets passed. From Q1 call: -'s Their guidance includes 90 million hit because of USDCAD weakening to 1.27. Well, it's already weakened further than this (currently 1.22). All numbers above are CAD, and 68% of their sales are in the US. This company is viewed by many as a broken compounder. Founding owner-operators no longer involved and sold their remaining stake in 2018. Many funds proceeded to sell.

Deal closed today: https://investors.atlanticpower.com/Acquisition-by-I-Squared-Capital Thanks for all the discussion and congratulations everyone.

I think Warren let it slip before Charlie:

So they're going to "defease" the debs, and hope to close the transaction on May 14. I picked up a bunch of shares earlier this month (with my CAD on the TSX), but the strength of the CAD has really eaten into the takeover offer (in CAD terms). Whoops.

Since there was some discussion about resin pricing, I thought I'd share the following excerpt from another packaging company that reported earnings recently (WinPak):

Here is gfp's ghost post:

And the deal falls apart because of EU regulators. Good call bizaro https://www.theglobeandmail.com/business/article-air-canada-calls-off-180-million-takeover-of-rival-air-transat/

[quote]Jonathan Goodman[/b> It's Jonathan speaking. As you know, that I am frugal, some say, cheap. And we have purchased -- in 2021, we have purchased year-to-date 2.9 million shares at $5.25 a share. And I'll just leave it at that. Thank you for your confidence in the Knight team and joining our Q4 2020 conference call. Please stay healthy and stay safe. Haha, that's one way to end an earnings call!

They amended their proxy: https://investors.atlanticpower.com/download/ATP+Supplement+to+Definitive+Proxy+Statement_2021.03.29.pdf - Iterate that their dealings with the Substantial Holder [of debs and MTNs] didn't influence the offer price for commons/prefs. - Explicitly state fees paid to advisor - Add table for financial estimates up to 2029 provided to advisor. Sasha posted a comment on his blog that this is a red flag and reduces his estimated probability that the takeover is successful. I don't think I agree -- seems more like they are clarifying information from questions from shareholders, for the best chance that the takeover is successful. Thoughts?

I'm pretty sure this was the one that got taken down quickly (I don't know why) - and everyone is after it! Someone on the board might have a recording of it?? He speaks so rarely I can't imagine there's been another one. I think this is the interview you are referring to?

Random thoughts since I've been thinking about this one with the increased spread. Honestly I thought it is a guaranteed approval by shareholders, as it was a big premium to where the prefs and commons have been trading for a long, long time. There are also no large shareholders to make a fuss, in contrast to the Great Canadian Gaming takeover, where a few large shareholders even came on the conference call and vented about the takeover price. After all that huffing and puffing by them (that the continue was worth double than what Apollo was offering to pay), they still voted pro-deal after a small bump. Looking at a chart of the debentures, you can't even tell on their chart when the deal was announced. They really aren't getting anything, other than early redemption? The takeover price on the commons is also only ~10% less than the strike price of their debentures. (~$3.78 CAD vs. $4.20 CAD). So if they vote it down, worst case is they keep clipping their 6% coupon until 2025, best case is there is a new offer where the price is above their strike...right? The other thing that is odd about the debentures: the daily volume on these has skyrocketed since March 3rd. Seems unusual that anyone would dump them -- and who is accumulating? There's no associated increase in volume of the commons, it seems to be specific to the debs.

I saw this interesting thread on twitter that the Artis preferreds will likely need to be redeemed because of their (desired) switch from a closed-end to an open-end trust:

Picked up some Fortis