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PSH.L - Pershing Square Holdings


giofranchi

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Can someone explain what is the logic behind "it should trade at a premium"?

Does the NAV account for the taxes yet to be paid on the profitable positions?

 

There is a section in the most recent AR titled “Our Strategy’s Structural and Competitive Advantages”. I think that section explains quite well why Ackman believes PSH should trade at a premium to NAV. If he is right or wrong, I cannot tell…

 

Capital gains are recognized as earnings, though taxes in Guernsey are almost negligible.

 

Gio

 

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PSH will host its quarterly investor conference call on 18 May 2015 at 15:00 GMT. During the call, Bill Ackman and the other members of the Pershing Square investment team will address questions e-mailed by investors to ir@persq.com.

 

Any question for Bill Ackman?

 

Bill Ackman presented at the Sohn Investment Conference today in New York City. The presentation will be available on Tuesday, 5 May 2015 at 18:00 Central European Time (12:00 PM Eastern Daylight Time) at http://pershingsquareholdings.com/media/2014/09/Ira-Sohn-2015-Presentation.pdf.

 

Cheers,

 

Gio

April-Performance_Quarterly-Call_Sohn-Presentation-Press-Release.pdf

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Please, find the presentation in attachment.

 

Cheers,

 

Gio

 

I just wanted to note that I posted a link with this presentation on the Valeant thread as Ackman provides a valuation of Valeant in the presentation starting on page 14 and it would be great to discuss that portion of the presentation on the Valeant thread. I have some questions there re some of his assumptions...

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Sounds like they're sinking 15% of their capital into something that is around a $50 billion cap. Noted that it will be a few months before they will have to disclose.

 

$18B AUM x 15% = $2.7B position

@ 5% threshold that's around $54B

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My guess would be KRFT given that they like 3G and platforms. Heinz deal was announced towards the end of the quarter, so it would make sense that they started building a position in April.

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KRFT after the whole deal is done will be a lot more than $50 billion but that is possible.  The valuation seemed pretty high when I last looked at it.

 

I thought MON because it fits into work Ackman or his analysts have done on PAH and ZTS.  A high quality business that fits into a growing population with higher quality food needs.  At the same time there could be some room for activist investing since they have underperformed and capital allocation of late has been poor (like Syngenta bid with a lot of undervalued stock).

 

Plus it would tie Ackman's "save the world" thesis together by owning the company that every consumer hates and gives our children cancer (Roundup or whatever) while at the same time crusading to kill Herbalife to save the hispanics.  It would just make my day to see him go activist on Monsanto.

 

We shall see in a few months....

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I have no idea if this is the one he is buying, but he did do an awkward "no comment at this time" when one of the Q&A questions was to get his thoughts on the KRFT-HNZ tie-up...  Personally, I started a DRIP with the company's plan administrator (wells fargo) the morning of the merger announcement, as this could be a nice platform for 3g to run for a long time and you are starting with a large special dividend and a high ongoing yield after that.  A good set-and-forget investment for some future child's benefit.

 

My guess would be KRFT given that they like 3G and platforms. Heinz deal was announced towards the end of the quarter, so it would make sense that they started building a position in April.

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It's not as simple as that for US taxpayers at least.  If I pay $82 for KRFT and receive $16.50 in cash and 65.50 in ex-div NewKRFT-HNZ stock (day 1) I don't owe any tax.

 

From the recent filing:

"For U.S. federal income tax purposes, the special dividend, the merger and the subsequent merger should be treated as a single integrated transaction. As a result, both the Kraft Heinz common stock and the special dividend should be treated as received in exchange for shares of Kraft common stock pursuant to a transaction qualifying as a reorganization for U.S. federal income tax purposes. A Kraft shareholder who exchanges his or her shares of Kraft common stock for shares of Kraft Heinz common stock pursuant to the merger and receives cash in the special dividend will recognize gain, but will not recognize any loss, for U.S. federal income tax purposes. The amount of gain recognized will equal the smaller of (i) the amount of cash received in the special dividend and (ii) the excess, if any, of (x) the amount of cash received in the special dividend and the fair market value of the Kraft Heinz common stock received in the merger (determined at the effective time of the merger) over (y) the Kraft shareholder’s tax basis in the shares of Kraft common stock surrendered in the merger."

 

 

Don't forget the tax some of us would have to pay on that special dividend..

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