FFHWatcher

Why wouldn't Abitibi counter offer at $0.90, maybe even $0.85, push it through the Canadian legal system, get FFH and Pabrai and Oakmont to sign a revised super Hard lock up and Bob's your uncle. Savings would pay for ABH legal fees.

Isn't the larger question, 'Why would anyone trust the Canadian Securities Regulator and therefore why would anyone invest in Canadian securities if insiders that control both the buyer and the seller are permitted to force approx. 50% of the shareholders to accept an offer that is 40% below a competing offer? If Fairfax wants to sell their FBK shares to Abitibi for $1., go right ahead, although I am not sure FFH shareholders would be pleased (however, FFH investment team has proven themselves, so I will assume they did what was best at the time). If you (ABH) then uses those shares to force other INDEPENDENT shareholders to tender to a $1.00 offer and essentially KILL the MERC $1.40 offer, than that is a complete disservice to (minority) shareholders everywhere.

They (ABH) are buying dollar bills (FBK) for fifty cents (ABH offer). That is the payoff. I learned that something is only worth what someone else is willing to pay for it. No more and no less. If the ABH $1. offer is the only one that came forward (which was very possible a few months back), than FBK is only worth $1 and they should be able to buy it. The issue is that somebody is offering 75 cents (MERC offer) for the dollar bill (FBK) but the acquirer (ABH) is using the legal system to force the remaining holders of the dollar bills (Non FFH, Pabrai and Oakmont shareholders) to accept 50 cents. A 4 year old can figure out that the $1.00 offer isn't fair and that FBK is worth a lot more than $1. Apparently, at least $1.40. If it was $1.00 vs $1.04 than they (ABH) could argue their offer is worth more but at $1.40? Please review this clip from an Ally Bank commercial to see how FBK shareholders really feel. http://www.youtube.com/watch?v=7qb0vquRcys

I am with Sanj regarding managing other people's money. Only do that if you truly need the money (ie. generated from fees) to live off of. There is pain in managing your own money when it goes down in value but it pale's in comparison to losing other people's money. I found it really tough as a financial advisor (not a money manager) and that was the main reason why I exited the business after only 13 years. It is easy when the market goes up 8-10%/yr (ie. the 1990's) but when was the last time we saw that? I have been retired for 5 years and I spend too much time watching stock quotes. I have done a few different projects but nothing that earns an income. I help my brother with his business but I haven't charged him yet and may continue to do that part-time. I keep coming back to investing in businesses as I don't really have any sort of 'passion' that I want to put 100% of my energy into, besides investing. I love it and I can spend hours and hours per day reading about investing, reading about businesses, comparing them, etc. I have a lot to learn and I am starting to put together a clearer framework as to how I plan to improve my skills. I look at it as going to 'University' but I am doing it myself and it is highly specialized in the area I enjoy. If you plan on managing your own money intensively, than I would recommend that you set it up like a professional. Have regular hours, have a regular desk, wear something besides your pajamas, have a business plan, have files, have a process, have checklists, keep accurate records, pretend you have a boss looking over your shoulder analyzing your work, pretend you have to submit your work to Buffett and Munger for analysis and review before you invest in anything.... Be a professional and hold yourself up to very high standards. Find hobbies that having nothing to do with investing and make sure you have several 'other' interests where you ignore investing completely for many hours/day.

Why doesn't Resolute just buy FFH, Pabrai and Oakmont's FBK shares for $1.00 and become a large shareholder of FBK. If FFH wants to give away their shares for $1.00, let them. Then, they can look at buying the other 50% or so that they don't already own. I'm am not sure of the laws in this case, but if 40-50% of the shareholders feel the price is too low, can they forcibly cause almost 50% of shareholders to tender their shares at $1.00? 50.1% seems crazy. I don't recall a discussion of the legal implications in this case. Is it standard, a fixed percentage, different on a case by case situation, etc.?

Certainly tempting. Possible downside at $1.20 is $0.20 (assuming $1.00 is the floor offer with 16% downside and only 8% upside to $1.30). But at $1.05 or $1.06, there is only likely 5-6% of downside and 24% upside (to $1.30). Much more appealing here but I would hate to add up the number of times I have been burned on FBK. Perhaps this is a chance to make it back? Or perhaps this is a chance for me to get burned again? It would be an absolute travesty to minority holders if they only get $1.00. Absolute robbery with a $1.30 offer on the table. What Steelhead is doing is beyond an ordinary investors comprehension.

Just for fun, what do you think happened first. Did FFH go to ABH and say, 'can you guys do something about FBK?' Maybe buy it for nothing or at least put it in play with the off chance that you get it. Or did ABH approach FFH and say, 'we want to bring FBK into ABH and here is why it is a good deal for ABH shareholders.' If you were a long term FBK shareholder and you accept the ABH offer, how is that shareholder possibly going to participate in the success of FBK, as it would represent such a small piece of ABH. Or are you suggesting to just leave FBK as a stand alone pubco? How is Mercer's bid truly dilutive? If either company are successful in acquiring the company, dilution is a moot point. If ABH gets the company at $1.00 than they would have to cough up more money but that cash should be sitting in FBK bank account. The dilutive part of the deal affects the number of shares needed for the Abitibi bid to go through, I assume.

Who the heck tendered $1M shares at $1. when they could sell them on the open market for $1.30? That must be illegal.

I think the point I was making is that when a company offers to buy a company for $15.00 the public shareholders get $15.00. No more, no less. As far as a PPA goes, how does it immediately affect working capital? I see how it adds to revenue with minimal expenses in the future but it isn't like a $30M 'bonus' gets paid into the coffers of FBK at any one point in time. What if FBK decides to close and shutter and write down the RBK mills entirely just after the deal is to close? What if NBSK goes to $600/tonne? Are shareholders on the hook to give some of their money back? Maybe Resolute or Mercer should write something like that into the deal? All that I am trying to say is, things that happen after an acquisition date are a risk, both positive and negative. That is baked into the price. If Resolute can get enough shareholders to say yes at $1, good for them. If MERC can get them at $1.30, good for them. As for writing in contingencies based on what may or may not happen a few months after an acquisition is approved by shareholders, I say it ain't going to happen. Shareholders can't have their cake and eat it too and neither can buyers. Either approve the deal now or turn it down. Same goes for the $1.30 from MERC. Maybe shareholders should counter with an earn out based on future EBITDA? :-) Nortel should have wrote contingencies into their purchases. "If we have to write this $5B purchase off to $0. in the next 24 months, we want all our money back". Similarly, the business owner that sold Google the technology for Adwords should have had a contingency built into it based on profits for the next 5 years (actually, private companies do this all the time but I have never seen public company M&A do this).

67M shares deposited @ $1. when share price is trading at $1.30 plus another offer on the table at $1.30 (67M x $0.30 = $20M!!). Absolutely bizarre. I would love to be a fly on the wall at a Resolute meeting re: Fibrek or an FFH meeting re: Fibrek. I am speechless thinking that Resolute is pouring resources into this .... at $1.00. Imagine if they actually got the number of shares required?

Why would MERC have to do a working capital adjustment for PPA? I have seen private acquisitions do adjustments but not pubco acquisitions. $1.30 is a $1.30 unless there is something I missed in the agreement. Is there specific wording that you are referring too in the MERC offer?

If Resolute/Abitibi were to say, 'we have enough problems right now, we are going to walk away', wouldn't MERC get FBK for $1.30, assuming no other bidders present themselves? If that ends up happening, than it could be argued that MERC ends up with FBK without paying for the PPA, unless of course you contend that Abitibi wasn't willing to paying anything for it and MERC was willing to paying $0.30/share for the chance of it becoming a reality. Either way, I believe that the odds of this deal going through at $1.30 is many times more likely than the $1.00 deal going through. Therefore, holding at $1. was a way lower risk venture vs. holding at $1.32.

*****Ben Graham****** It looks like you have a new MO. You now start your forum posts with an asterisks * to bring more attention to your posts. How is it that you have this unique ability to piss me off with almost every post your write. I assume it is mission accomplished, as far as you are concerned. I made a long list in the earlier LVLT thread and now you have picked up a new habit, which is adding * to the start of new threads. Of course, your likely goal is to bring more attention to your posts. I believe it is very close to the level of a spammer with the mix of a troll. If Sanjeev is reading this, I kindly ask him to remove topics that use extra characters to bring attention to their posts, not unlike highlighting all your crap in red, cap locks, italics, etc. You do them all and you stand out as the neighborhood dink here among a few thousand readers/posters. In my books, you are the #1 annoying person here, not necessarily because of your content (which I can easily ignore), but because of the way you try to enhance your content to the reader via highlighting, cap locks, italics, using references to great investors such as Mason H, WEB, etc., and now we can add the * to your arsenal of annoying posts.

Don't get carried away. He's going to make investment bets on various things and like any manager, some will work out and some won't. He's making the best calculated investments he can. Half a billion in RIMM, which sounds like a massive amount to you and me, is less than a 2% position for a business that has $30B in assets. Even if you only go by investable assets of $23B, it accounts for less than a 2.5% position. So everyone keep your pants on! :o Cheers! Not to mention that Prem is now a board member (at RIMM not Sanjeev's board). That equals an even stronger...'we don't comment on portfolio investments'. Hope to see Balsillie at the Corner of BRK/FFH meeting...:-) It would seem Uccmal is forever linked to RIMM.

Anybody else have Déjà vu when you read the list of presenters? Looks like Sanj should be upping his BRK/FFH Dinner fee!! Corporate Executive Session - Topic: Looking for and creating shareholder value – Industry perspective Presenters: Tom Ward, Chief Executive Officer, SandRidge Energy Marc Betrand, President & CEO, MEGA Brands Inc. William McMorrow, Chief Executive Officer, Kennedy Wilson Richard Garneau, President & CEO, Resolute Forest Products

Alertmeipp : I understand that there is a gap and FFH + ABH (possibly) feel their offer bridged that gap. Taking that one step further, they likely feel that their offer closed that gap and if the deal goes through (maybe even at 25% more?), feel they are still buying the assets cheap. Does that mean you're in on the wager?

17M shares have traded since the deal was announced. Who would buy shares at .95-1.05, only to want to tender them a few months later at $1.? There is good liquidity in the stock at >$1., so why would anyone hold their shares, only to tender at a lower price? They would just sell their shares for >$1. on any given day. Therefore, I am concluding that everyone who bought those 17M shares won't tender (unless they are ABH friendly, which I don't think is permitted, at least in FFH case, what about others?). 43M (130M x 33.3%) have to vote against it, correct? SD - FBK is not a half billion dollar company. That would value FBK at more than Mercer and Fortress Paper. The only way Fibrek goes for over $1.50 is if they change their name to Fibrek Cloud Computing. Wager - I will wager $500 if Fibrek is sold for > or equal to $1.50 (any mix of cash and shares) by the time Sanjeev has the BRK/FFH dinner/April 25th to the The Crohn's & Colitis Foundation of Canada. If it goes for under $1.50, than the person on the other side of the bet has to donate the same amt. Any takers? It is a good cause. If the deal is called off, shareholders will need to preserve their cash.

Two comments 1/ Who said CRA has to prove their case in order to fine you and re-assess you? Generally, CRA re-assesses, fines you, etc., and once you pay it, then you can appeal it. If you don't pay it, your fines and interest will build if you are eventually found guilty. That is my understanding, anyways. 2/ In general, the rule is dumb. You can invest in a mutual fund that trades hourly, does it full time, advertises their services, are staffed by CFA's, etc. and all of the investors gains and losses are considered capital gains and losses. Therefore, if the fund manager had his own money in the fund, is CRA suggesting that their gains and losses are considered business income? Dumb. Therefore, if CRA wants to say your trading is business income, just put your assets into some sort of trading entity, such as a trust or corp....of course there are costs involved but the concept seems sounds, which makes CRA's position a bit...dumb.

Sharper, when you say 'we' keep coming back to $2., aren't you referring to you? Who else is coming up with $2.? Don't get me wrong, I would love to see $2. but what are the odds this gets over $1.20? I am not basing my comments on valuation, simply on what the market is telling me/us and so far, no one is willing to pay over $1.01 and no other corporation has said anything publicly yet. While I am long as well, I have lost lots on this stock and it sounds like you may have some ownership bias (not sure if that is the exact right phrase). I get it all the time, as it would seem given the abysmal performance of my portfolio as of late. Edit at 4:21pm. SD, who just bought at $1.02 at 3:59pm and made my point above inaccurate?

I think they have the right buyer. Hopefully the wrong price. I think the price they are getting is pretty cheap but which shareholder wouldn't? Since I am a betting man, I bet that they raise the price. There are always tactics with offers, especially ones that are this low. Not entirely shocking that FFH has agreed on the price (ok, a little surprised) but I am surprised that Pabrai locked up his shares. As I recall, he just bought last year and he bought at or around currently pricing. Was he incorrect in his valuation, has something changed, does he see better opportunities elsewhere, did he underestimate his liquidity, or if Prem says jump, does Pabrai say, how high sir? (written in humour but I think most here would also say, How High Sir). I think it is a reasonable prospect to add significantly at these prices. I haven't, doubt I will, as my cumulative losses are enough at this point. I could change my mind. This isn't FFH buying nor is it Prem buying, it is Abitibi. If it was Prem, I would more likely double down knowing that I might make 5-10+% in a short period of time, with limited downside. I think the odds are good that the deal could go through at 10-20% more with minimal discomfort to Abitibi. $1.50 seems like a pipe dream at this point. If mgmt and the board at Fibrek push for a higher price or some sort of reorganization with a division being sold, etc., there is a reasonable chance that the stock could go higher but I would say there is a great chance we will eventually see a return to 75 cents. Fibrek could also commence talks with Abitibi regarding what they really want. Do they want St Felicien or US Recycled Pulp ops? Maybe sell them one for $100 or $200M or whatever it is worth. At least there is a catalyst now. I was hoping the catalyst was a dividend or (the sale of the US Recycled Pulp ops + debt reduction with proceeds + initiation of a dividend with St Felicien free cash flow). Summary : 60% chance that deal will go through as contemplated, 20% chance price will be 10-20% higher and deal will go through, 20% chance it will fall through and FBK mgmt will come up with another option. Does anybody else feel that there is a reasonable chance that Abitibi increases their bid?

Of course you're familiar with them, they were brands. Are you two familiar with Blackberry too? <That was for Uccmal ;) > 5 year BB user just switched to iPhone 4S and very happy. I had to use my brothers Blackberry for Google Maps yesterday. I almost threw the BB out the window.

Tax free rollover only applies to those with a cost below $1. Not ffh or pabrai or me. If your cost is over $1, why would you do the rollover? Just sell, realize loss and buy resolute if you really want too. If you have millions of shares, it makes sense because you couldn't sell that many shares at $1 on the open mkt? I'm just saying the tax-free rollover component of the take-over applies to few

It took me a full year to get all the information from Warren Buffett's Snowball into my head via my eyes (reading). It took me one week to get all the information from Steve Job's book into my head via my ears (audiobook). Suffice to say, my first impression of the audiobook experience is positive. I listened to it on my iPhone 4S through a subscription with Audible. $7.50 for the entire audiobook. Short term promo with audible.com for $7.50/mo for 3 months then about $15/mo thereafter. Able to cancel anytime (that is my understanding), so you could just get the Jobs book and only pay $7.50. If you stay, you get 1 audiobook credit/month for your $15. monthly charge.

Where was that said?

Sharper; It sounds like you are suggesting that FBK should receive a valuation 'upgrade' due to the electricity revenue (aka a pop in the share price?). Fundamentally I agree, however I don't know of any other company that has added electricity generation revenue that has received a higher valuation in the stock market. I only follow a few, so I could be off on this one. It is possible that the electricity revenue is simply offsetting the erosion in the rest of their business? As a shareholder, I would love to see the day come where the pulp business is self supporting and the electricity revenue to paid out to shareholders in the form of a dividend. I suspect this day is either far off or will never come, although CFX has been paying out healthy dividends and with FBK's low level of debt (compared to MERC who has one of their mills highly leveraged but segregated), they may be next in line to restart some sort of small dividend but I think they need to get their RBk/US division running a lot more profitably before that were to occur.