nestorius
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Posts posted by nestorius
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Here's the bull case on AMZN margins.
http://csinvesting.org/wp-content/uploads/2012/08/amzn-valuexvail-2012-josh-tarasoff1.pdf
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The rule of thumb we use is 10% maximum 20%.
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Also, did anyone save any of the sellside primers? There was a link that was taken down. Sometimes, it's a pretty good starting point for industries that we don't understand.
I have no particularly deep personal industry background of note as I am also a former investment banker, but a package of primers (likely the one you refer to) is available here: kickass.to/investment-banking-industry-primers-99-pdfs-t7369045.html
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I was previously an M&A banker so I have a few thoughts on this.
1. EPS accretion "myth" is the cornerstone of much public company analysis, with the E in EPS often heavily adjusted to remove all "bad" things (non-cash PPA, restructuring, deal expenses, etc.)
2. Non-fundamental "valuation" methods drive price negotiation, e.g. multiples of precedent transactions or even "precedent premia paid".
3. Aggressive forecasts and aggressive synergies forecasts.
4. Investment bankers paid on success fee basis and other consultants generally incentivized to generate future business on integration (management consultants, tax, etc.). Corporate development team needs to justify existence and budget.
5. So many psychological factors that relate to the above... falling in love with the deal "if we don't buy this now we'll never get it" / sunk costs, overoptimism, high self-regard, social proof justification of M&A during hot markets, competitive spirit in auctions / avoidance of "loss", poor incentives (growth, levered metrics), inconsistency avoidance resulting in denial of negative data as diligence goes on and on.
6. Complicit boards.
At the end of the day the CEO needs to be a) comfortable with their job and focused on the long-term, b) experienced in M&A so they can identify the problems and c) incentivized properly or else all of the above factors will encourage action over inaction and delude them. I have honestly heard of several occasions where the company tells the bankers to put away their spreadsheets. M&A suffers many of the same psychological challenges of investing but many multiples worse and limited liquidity to change your mind.
Horrible business so glad I am out.
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I don't but here is a list of BIT companies with market cap between E40M and E80M, with float < 50%. Formatting not going to be great.
Company Name MC EUR Float % Frendy Energy S.p.A. (BIT:FDE) 56 52 Aedes SpA (BIT:AE) 47 50 Ratti SpA (BIT:RAT) 57 49 Ciccolella SpA (BIT:CC) 57 47 CSP International Fashion Group SpA (BIT:CSP) 46 43 Exprivia SpA (BIT:XPR) 44 41 M&C S.p.A. (BIT:MEC) 65 41 Tesmec S.p.A. (BIT:TES) 79 40 Irce SpA (BIT:IRC) 49 40 Gefran SpA (BIT:GE) 43 34 Brioschi Sviluppo Immobiliare spa (BIT:BRI) 67 33 B&C Speakers S.p.A. (BIT:BEC) 66 32 Autostrade Meridionali S.p.A. (BIT:AUTME) 70 31 Kinexia SpA (BIT:KNX) 45 31 Bolzoni SpA (BIT:BLZ) 80 31 DADA SpA (BIT:DA) 57 31 K.R.Energy S.p.A. (BIT:KRE) 47 30 Aeffe S.p.A. (BIT:AEF) 61 29 Premuda SpA (BIT:PR) 51 27 Panariagroup Industrie Ceramiche S.p.A. (BIT:PAN)62 23 Ambienthesis SpA (BIT:ATH) 47 19 Monrif SpA (BIT:MON) 42 19 Cobra Automotive Technologies SPA (BIT:COB) 43 15 Enervit S.p.A. (BIT:ENV) 60 13 Fintel Energia Group SpA (BIT:FTL) 55 5
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Any source for the above? Thank you.
From a term sheet I received this morning from BMO, text of which I pasted here: http://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/ffh-at-multi-year-high/msg139809/#msg139809
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I wonder how the underwriters will sell this stuff now that share prices are below the bought deal..
Gross proceeds of CAD $431 million. You don't know what fees they are getting...
A single institution is purchasing 30% of the $431mm (presumably at the $431/share), so only 700,000 shares to be sold to the public where the brokers are actually taking price risk.
On the public tranche there is a 4.0% fee, and on the committed inst'l tranche there is a 1.0% fee. So total fees between the two tranches will be $13.4m, or roughly $19/share of fees on the public risk tranche. So the brokers' "cash breakeven" price on the shares is around $412/share.
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I figure this is relevant for this thread...
Fairfax Financial Holdings Limited
Treasury Offering of Subordinate Voting Shares
Issuer:
Fairfax Financial Holdings Limited (the “Company”).
Issue: Treasury offering of 1,000,000 subordinate voting shares (“Subordinate Voting Shares”) including 300,000 Subordinate Voting Shares sold to an institutional investor.
Issue Price: C$431.00 per Subordinate Voting Share
Issue Amount: C$431,000,000
Use of Proceeds: The net proceeds of the offering will be used to augment its cash position at the holding company and for general corporate purposes.
Form of Offering: Bought deal by way of a prospectus supplement to the Company’s short form base shelf prospectus dated December 10, 2012 to be filed in all provinces and territories of Canada. U.S. sales by private placement via Rule 144A.
Listing: An application will be made to list the Subordinate Voting Shares on the Toronto Stock Exchange (the “TSX”). The existing subordinate voting shares are listed on TSX under the symbol “FFH”.
Eligibility: Eligible for RRSPs, RRIFs, RESPs, TFSAs, RDSPs and DPSPs.
Joint Bookrunners: BMO Capital Markets and CIBC
Commission:
4.00% / 1.00% commission payable on portion to the institutional investor
Closing:
November 15, 2013.
Is there a 13F equivalent in Canada?
in General Discussion
Posted
To the extent TSX-listed companies are SEC registrants / US-listed, holders will include them in their 13-F.
For non SEC registrants, as you say, 10% is the threshold for an "early warning report", but there is no regular updating requirement if the ownership stays above that level. OSC is discussing whether to conform disclosure requirement level to the 5% threshold.
Other than for mutual funds that report their positions on a regular basis, there is no "13-F" style disclosure requirement for Canadian funds.