CKI - Clarke Inc.

[Andy Dufresne]

kab60

 

This link is updated every few weeks on average (9 times in the past 5 months) and I think its sufficient - I fail to see the use of checking daily (but would love to understand the logic!):

 

http://www.clarkeinc.com/stockinfo.aspx?un=2

 

I'm pretty sure that Clarke is buying back shares below CAD 10 as BV is still around 13 (and they bought at higher prices if memory serves), though if they have a better use for their cash, I'm happy for them to go ahead with it!

 

[doc75]

kab60

 

This link is updated every few weeks on average (9 times in the past 5 months) and I think its sufficient - I fail to see the use of checking daily (but would love to understand the logic!):

 

http://www.clarkeinc.com/stockinfo.aspx?un=2

 

I'm pretty sure that Clarke is buying back shares below CAD 10 as BV is still around 13 (and they bought at higher prices if memory serves), though if they have a better use for their cash, I'm happy for them to go ahead with it!

 

I wrote a little script to grab insider trading info for each stock in my portfolio (from TMX Money), so I see what Clarke is doing.  There is no real point to checking daily... but I imagine their buyback program is automated, so when they stop their usual 5400 per day purchases as the stock falls I must say get curious what they're up to.

[EliG]

Even if they didn't, I don't really get recent price drop from 11.28 (november 23th) to 9.40 today (december 8th) - almost 17 pct.

 

Have you checked what the rest of Canadian market did in the last few weeks? Everything got slaughtered in sympathy with the oil crash.

 

Chart CKI.TO vs XCS.TO (Canadian Small Cap Index ETF). Clarke tracked the index pretty closely since the start of correction. Which is kind of amazing, given how illiquid Clarke is.

 

In other words... There is nothing to see here. Move along.

[LesPaul]

Thanks for the info guys.

 

I think they've reached the max for the NCIB through the TSX.

 

Shares outstanding in May 2014 were 20,518,923 and 1,025,946 able to be repurchased as per:

 

http://www.newswire.ca/en/story/1360365/clarke-announces-renewal-of-normal-course-issuer-bid

 

And at December 1st, 2014 we're at 19,497,691 as per the Clarke website - so I guess that leaves 4,714 as the difference...which I believe is the last repurchase as per:

 

https://canadianinsider.com/node/7?menu_tickersearch=CKI+%7C+Clarke

 

Feel free to slap me if I missed something.

 

[Andy Dufresne]

LesPaul 

 

Clarke issued a new NCIB on Nov 19th:

http://clarkeinc.com/news1.aspx?un=1

 

Cheers!

 

[kab60]

Even if they didn't, I don't really get recent price drop from 11.28 (november 23th) to 9.40 today (december 8th) - almost 17 pct.

 

Have you checked what the rest of Canadian market did in the last few weeks? Everything got slaughtered in sympathy with the oil crash.

 

Chart CKI.TO vs XCS.TO (Canadian Small Cap Index ETF). Clarke tracked the index pretty closely since the start of correction. Which is kind of amazing, given how illiquid Clarke is.

 

In other words... There is nothing to see here. Move along.

 

Thanks for the update. I've been pretty ignorant in what was going around in the surrounding market since I was solely looking at the BV of Clarke Inc., which haven't moved much. Will be interesting to see whether the company has taken advantage of the situation.

[Hielko]

Even if they didn't, I don't really get recent price drop from 11.28 (november 23th) to 9.40 today (december 8th) - almost 17 pct.

In other words... There is nothing to see here. Move along.

Disagree. Clarke is a combination of cash (if anything that becomes more valuable when other stuff drops), Holloway and Terravest. If those components don't go down Clarke shouldn't go down either, and when it does together with the market it's called an opportunity. Not nothing to see here. Move along.

[EliG]

LesPaul 

 

Clarke issued a new NCIB on Nov 19th:

http://clarkeinc.com/news1.aspx?un=1

 

Cheers!

 

The new NCIB is through the OTC Markets. The daily OTC volume is too low to do any meaningful buy backs. Hopefully they can find a few willing sellers to do the block trades, but I wouldn't count on it.

 

The TSX NCIB was approved in May 2014. I believe they can't do another one before May 2015.

[LesPaul]

LesPaul 

 

Clarke issued a new NCIB on Nov 19th:

http://clarkeinc.com/news1.aspx?un=1

 

Cheers!

 

The new NCIB is through the OTC Markets. The daily OTC volume is too low to do any meaningful buy backs. Hopefully they can find a few willing sellers to do the block trades, but I wouldn't count on it.

 

The TSX NCIB was approved in May 2014. I believe they can't do another one before May 2015.

 

Indeed...the May 2014 NCIB news release states, "Purchases under the plan may commence on May 27, 2014 and will terminate on May 26, 2015."

 

I'm sure it won't help the share price without Clarke on the other side of the TSX to buy on any given day; however, barring any major news, I'll remind myself not to get too worked up about big swings up or down based on a trading day of 10,000 shares for example.

[Andy Dufresne]

LesPaul 

 

Clarke issued a new NCIB on Nov 19th:

http://clarkeinc.com/news1.aspx?un=1

 

Cheers!

 

The new NCIB is through the OTC Markets. The daily OTC volume is too low to do any meaningful buy backs. Hopefully they can find a few willing sellers to do the block trades, but I wouldn't count on it.

 

The TSX NCIB was approved in May 2014. I believe they can't do another one before May 2015.

 

EliG - I originally pointed out to LesPaul that he had indeed "missed something" - there is an additional NCIB. Now you said that it's not important because OTC volume is low. I beg to disagree with your analysis:

 

First, I believe the causality in your statement " The daily OTC volume is too low to do any meaningful buy backs" is suspect and you yourself point this out with the second part of the sentence "Hopefully they can find a few willing sellers to do the block trades". In fact, I would argue the reverse ... since we agree that there can be no TSX NCIB in the next 6 months, and since we also agree that the TSX NCIB has been exhausted, the most logical conclusion is that the entire purpose of the OTC NCIB is to signal that Clarke is happy to buy more by any means legally possible (and they have no other means AFAIK).

 

Since the shares are thinly traded and quite volatile, anyone owning a block of shares with some modicum of sense and an email can set up a sale quite legally now. If management did not believe that there is some chance of finding such sellers in this market, I doubt they would have gone ahead with the OTC NCIB ...

 

Of course, I may be entirely wrong ...

 

Cheers!

 

[kab60]

Not much to see, but there's a new share update today.

 

Clarke Inc. bought 4.714 shares since december 1st.

 

New share update today - outstanding shares: 19,492,977

 

From 19.497.691 on dec. 1st. (and 19,652,991 november 18th).

 

[jm25]

Halifax, Nova Scotia – December 16, 2014 – Clarke Inc. (“Clarke” or the “Company”) (TSX: CKI) today

announced its intention to commence a substantial issuer bid (the "Offer") pursuant to which the

Company will offer to purchase up to 2,500,000 of its outstanding common shares (the "Shares") at a

purchase price of $9.50 per Share in cash (the "Purchase Price").

Details of the Offer, including instructions for tendering Shares to the Offer, will be included in the

formal offer to purchase and issuer bid circular and other related documents (the "Offer Documents"),

which are expected to be mailed to shareholders, filed with securities regulators and made available

shortly on SEDAR at www.sedar.com and on the Company’s website at www.clarkeinc.com. The Offer

will not be conditional on any minimum number of Shares being tendered although it will be subject to

various other conditions that are typical for a transaction of this nature. The Offer is expected to remain

open for acceptance until January 26, 2015, unless withdrawn or extended by the Company. If more

than 2,500,000 Shares (or such greater number as the Company determines it is willing to take up and

pay for) are properly tendered to the Offer, the Company will take-up and pay for the tendered Shares

on a pro-rata basis according to the number of Shares tendered (with adjustments to avoid the purchase

of fractional Shares). The Company intends to fund any purchases of the Shares pursuant to the Offer

using cash on hand and available credit facilities.

The Company has entered into a lock-up agreement with Scotia Learning Centres Incorporated, Geosam

Capital Inc. and Geosime Capital Inc. (together, the “Sellers”) pursuant to which the Sellers have agreed

to tender to the Offer such number of Shares as is required such that the Sellers and certain other

affiliated persons identified by the Sellers will collectively own not more than, but as close as possible

to, 48.0% of the Shares upon completion of the Offer. The purpose of the Sellers agreeing to tender in

this manner is to avoid the Offer resulting in an "acquisition of control" of Clarke by a person or "group

of persons" for purposes of the Income Tax Act (Canada), which could have adverse income tax

consequences to Clarke.

The directors of the Company believe that repurchasing Shares represents an attractive use of the

Company's financial resources and is in the best interests of its shareholders as the recent trading price

of the Shares is not fully reflective of the value of the Company's assets. Neither the Company nor its

board of directors makes any recommendation to shareholders as to whether to tender or refrain from

tendering Shares to the Offer. Shareholders are strongly encouraged to review the Offer Documents

carefully and to consult with their financial and tax advisors prior to making any decision with respect to

the Offer.

 

[Andy Dufresne]

The new NCIB is indeed good news! CKI would go down to ~17 m shares:

 

1. Armoyan wants to raise his stake from ~40% to 48%, which is a big vote of confidence

2. ~13% of shares will be gone for ~ 0.75 of BV, which should add ~ 3.6% to the BV of those who remain with their shares

 

Cheers!

[Guest roark33]

It will however put a cap on the near term price, I would imagine.  Not sure anyone would buy in the open market above 9.5 with that tender offer on the table.

[jm25]

The new NCIB is indeed good news! CKI would go down to ~17 m shares:

 

1. Armoyan wants to raise his stake from ~40% to 48%, which is a big vote of confidence

2. ~13% of shares will be gone for ~ 0.75 of BV, which should add ~ 3.6% to the BV of those who remain with their shares

 

Cheers!

 

To be clear, this isn't an NCIB. It's an SIB - one time purchase.

[Andy Dufresne]

The new NCIB is indeed good news! CKI would go down to ~17 m shares:

 

1. Armoyan wants to raise his stake from ~40% to 48%, which is a big vote of confidence

2. ~13% of shares will be gone for ~ 0.75 of BV, which should add ~ 3.6% to the BV of those who remain with their shares

 

Cheers!

 

To be clear, this isn't an NCIB. It's an SIB - one time purchase.

 

Thanks for the correction! Regarding the "ceiling" roark mentioned - I think that:

 

1. Its more of a floor than a ceiling

2. There's a decent chance that CKI will have to raise their offer to get 13% of the company, which is more than 20% of the float

[Hielko]

The new NCIB is indeed good news! CKI would go down to ~17 m shares:

 

1. Armoyan wants to raise his stake from ~40% to 48%, which is a big vote of confidence

2. ~13% of shares will be gone for ~ 0.75 of BV, which should add ~ 3.6% to the BV of those who remain with their shares

 

Cheers!

 

To be clear, this isn't an NCIB. It's an SIB - one time purchase.

 

Thanks for the correction! Regarding the "ceiling" roark mentioned - I think that:

 

1. Its more of a floor than a ceiling

2. There's a decent chance that CKI will have to raise their offer to get 13% of the company, which is more than 20% of the float

1. Agree that it should be more than a floor than a ceiling. Who would sell below $9.5 if you can sell at that price to the company?

2. Don't think they will do that. They will just buy as much as they can at $9.5.

[Andy Dufresne]

Apparently buying back shares is all the rage  8)

 

http://www.marketwatch.com/story/terravest-announces-normal-course-issuer-bid-for-its-common-shares-and-automatic-securities-purchase-plan-2014-12-16-81733340

 

TerraVest Capital Inc. ("TerraVest" or the "Corporation") (TVK) announced today that it has received the approval of the Toronto Stock Exchange (the "TSX") to make a normal course issuer bid (the "Bid") for up to 905,424 of its issued and outstanding common shares (the "Shares") on the TSX.

[writser]

The stock will probably hover around the tender price for the next few weeks. However I couldn't care less. I have a nice chunk and am not tendering. I hope the stock tanks a bit and they manage to buy back 2.5m shares at $9.50: great news for shareholders.

[doc75]

1. Agree that it should be more than a floor than a ceiling. Who would sell below $9.5 if you can sell at that price to the company?

2. Don't think they will do that. They will just buy as much as they can at $9.5.

 

I'd like to ask #1 to whoever sold me a bunch under 9.30 today.

 

Agree with #2.  They're being opportunistic.

[kab60]

1. Agree that it should be more than a floor than a ceiling. Who would sell below $9.5 if you can sell at that price to the company?

2. Don't think they will do that. They will just buy as much as they can at $9.5.

 

I'd like to ask #1 to whoever sold me a bunch under 9.30 today.

 

Agree with #2.  They're being opportunistic.

 

#1 Obviously somebody who doesn't give a rats ass for EMH. :)

[Hielko]

1. Agree that it should be more than a floor than a ceiling. Who would sell below $9.5 if you can sell at that price to the company?

2. Don't think they will do that. They will just buy as much as they can at $9.5.

 

I'd like to ask #1 to whoever sold me a bunch under 9.30 today.

 

Agree with #2.  They're being opportunistic.

 

#1 Obviously somebody who doesn't give a rats ass for EMH. :)

Especially in an efficient market the existence of a tender offer from the company shouldn't have an impact on the share price, irrespective of the price of the tender offer.

[kab60]

1. Agree that it should be more than a floor than a ceiling. Who would sell below $9.5 if you can sell at that price to the company?

2. Don't think they will do that. They will just buy as much as they can at $9.5.

 

I'd like to ask #1 to whoever sold me a bunch under 9.30 today.

 

Agree with #2.  They're being opportunistic.

 

#1 Obviously somebody who doesn't give a rats ass for EMH. :)

Especially in an efficient market the existence of a tender offer from the company shouldn't have an impact on the share price, irrespective of the price of the tender offer.

 

Not sure I'm understanding this right (or EMH for that matter): but unless you need the cash now, or for tax reasons, it doesn't seem to make much sense that you sell at 9.30, when there's a buyer a 9.5?

[Hielko]

1. Agree that it should be more than a floor than a ceiling. Who would sell below $9.5 if you can sell at that price to the company?

2. Don't think they will do that. They will just buy as much as they can at $9.5.

 

I'd like to ask #1 to whoever sold me a bunch under 9.30 today.

 

Agree with #2.  They're being opportunistic.

 

#1 Obviously somebody who doesn't give a rats ass for EMH. :)

Especially in an efficient market the existence of a tender offer from the company shouldn't have an impact on the share price, irrespective of the price of the tender offer.

 

Not sure I'm understanding this right (or EMH for that matter): but unless you need the cash now, or for tax reasons, it doesn't seem to make much sense that you sell at 9.30, when there's a buyer a 9.5?

No, because the company is the buyer and whatever the company is potentially overpaying in the tender offer is coming from its own cash balance. As a result the shares should drop after the completion of the tender offer. So in an efficient market you could either sell at the current price, or sell a bit at a higher price in the tender offer and the remainder at a somewhat lower price. In theory it shouldn't matter. Of course that is just the theory.

[writser]

Another way to think about it: the expected profits from tendering your shares at $9.50 should be already incorporated in the market price.

 

If a stock trades at $20 and a self-tender is announced at $50 the stock will likely move up, to, lets say $30. Selling at this price isn't necessarily bad because this price already takes into account that you can tender a part of your holding for $50. When the tender offer expires the stock will likely trade down to $20 again. In theory it's all in equilibrium - otherwise market participants could arbitrage the situation (e.g. buy at $30, tender shares for $50, sell the remaining holdings for $30).