caprivenky

prem said in his letter that the intrinsic value is much higher then the market value . I have followed Whitney Tilson calculations over years on Berkshire and found that the market value has always caught up with his calculations. Can somebody in this group , who is a long term follower - can calculate the value of units/businesses in Fairfax and come up with a fair market value .

Fairfax Financial to Increase Cash Consideration Component of Its $4.9 Billion Cash and Stock Offer Marketwired MarketwiredMarch 10, 2017 TORONTO, ONTARIO and ZUG, SWITZERLAND--(Marketwired - Mar 10, 2017) - (Unless otherwise provided herein, all dollar amounts in this announcement are expressed in U.S. dollars) Fairfax Financial Holdings Limited ("Fairfax") (FFH.TO)(TSX:FFH.U) and Allied World Assurance Company Holdings, AG ("Allied World") (AWH) are pleased to announce that Fairfax has exercised its option to increase the cash consideration component of its offer to Allied World shareholders by $18.00 out of a possible increase of $30.00 per ordinary share. As a result, the cash consideration component of the offer will increase from $5.00 per ordinary share to $23.00 per ordinary share, together with the $5.00 special dividend that, subject to Allied World shareholder approval, will be payable in connection with the transaction, for total cash consideration of $28.00 per Allied World ordinary share. The increase in cash consideration will correspondingly reduce the "Fixed Value Stock Consideration" under the terms of the previously announced definitive merger agreement. Fairfax was able to increase the cash consideration through $1.6 billion of investments by minority co-investors in the Allied World acquisition vehicle that will be approximately 67% owned by Fairfax, including the previously announced $1 billion commitment from OMERS, a $500 million commitment from Alberta Investment Management Corporation ("AIMCo"), on behalf of certain of its clients, as well as certain other third party commitments. "We are pleased to be able to increase the cash consideration component of our cash and stock offer of $54.00 per Allied World ordinary share by $18.00", said Prem Watsa, Chairman and CEO of Fairfax. "Allied World shareholders will now receive total cash consideration of $28.00 per ordinary share in connection with our transaction and Fairfax will be able to minimize the dilution to Fairfax shareholders, while having the flexibility to buy back the minority investments from OMERS, AIMCo and others over 5-7 years' time. We are very grateful for the support we have received from our co-investing partners, including OMERS and AIMCo. Thanks to these co-investing partners, our Fairfax shareholders will be happy to know we will not need to issue approximately 3.5 million Fairfax shares, based on the March 9th closing price of our shares." "We are excited to be able to present Allied World's shareholders with an $18.00 increase in the cash component of Fairfax's offer," said Scott Carmilani, President, CEO and Chairman of Allied World. "By working with Fairfax to provide additional time to increase the cash consideration component of its offer, we were able to maximize the amount of cash our shareholders would receive, making the offer even more attractive." About Fairfax Fairfax is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. About Allied World Allied World, through its subsidiaries and brand known as Allied World, is a global provider of innovative property, casualty and specialty insurance and reinsurance solutions. Allied World offers superior client service through a global network of offices and branches. All of Allied World's rated insurance and reinsurance subsidiaries are rated A by A.M. Best Company, A by Standard & Poor's, and A2 by Moody's, and our Lloyd's Syndicate 2232 is rated A+ by Standard & Poor's and AA

its out http://s1.q4cdn.com/579586326/files/doc_financials/2016/2016-Final-Shareholders-letter.pdf

http://www.marketwired.com/press-release/fairfax-india-holdings-corporation-financial-results-year-ended-december-31-2016-tsx-fih.u-2196780.htm

* Fairfax Financial to acquire Tower * Deal for all cash offer of $1.17 per tower share, for an aggregate acquisition cost of $197 million * Offer unanimously supported by tower board, in absence of a superior proposal * Each tower director has undertaken to vote all tower shares in his control in favour of fairfax proposal * Board also confirms that fairfax proposal does not impact tower insurance policies and rights of policy holders * Two of tower's major shareholders, salt funds management and acc committed to vote in favour of fairfax proposal * All figures in nz$ Source text for Eikon: Further company coverage: NEXT IN MARKET NEWS

found the answer fairfax bought 35% stake in ICici Lombard over years for 347 million. now they are selling 25% of the stake for 1 billion$ not bad

Does anybody know ,what was their investment cost in icicle Lombard in 2001

Indian-born Watsa's Toronto-based Fairfax Group had in March last year, announced its decision to buy a 33% stake in BIAL from GVK Group for Rs 2,149 crore, valuing the eight-year-old airport at about Rs 6,500 crore. A month later, Fairfax signed another deal to buy 5% stake held by Flughafen Zurich AG in BIAL. GVK had said the sale was one of its fund-raising steps to reduce debt. The conglomerate has total debt of over Rs 22,000 crore on its books. The Bangalore airpo .. Read more at: http://economictimes.indiatimes.com/articleshow/56606882.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Article at livemint

Fairfax Financial Holdings Limited (TSX:FFH)(TSX:FFH.U) announces net earnings of $238.7 million in the second quarter of 2016 ($9.58 net earnings per diluted share after payment of preferred share dividends) compared to a net loss of $185.7 million in the second quarter of 2015 ($8.87 net loss per diluted share after payment of preferred share dividends), reflecting a net gain on investments, partially offset by a provision for (rather than a recovery of) income taxes, a lower share of profit of associates and a lower underwriting profit primarily as a result of catastrophe losses. Book value per basic share at June 30, 2016 was $406.07 compared to $403.01 at December 31, 2015 (an increase of 3.2% adjusted for the $10 per common share dividend paid in the first quarter of 2016). "Our insurance companies continued to have excellent underwriting performance in the second quarter and the first half of 2016 in spite of the Fort McMurray losses, with a consolidated combined ratio of 95.7% and 94.5% respectively. All of our major insurance companies again had combined ratios less than 100%, with Fairfax Asia at 83.3%, Zenith National at 83.9% and OdysseyRe at 94.4%. Net gains on investments of $229 million included $640 million of bond gains, partially offset by the impact of stock price fluctuations. Our operating income was strong at $209 million," said Prem Watsa, Chairman and Chief Executive Officer of Fairfax. "We are maintaining our defensive equity hedges and deflation protection as we remain concerned about the financial markets and the economic outlook in this global deflationary environment. We continue to be soundly financed, with quarter-end cash and marketable securities in the holding company over $1.5 billion." The table below shows the sources of the company's net earnings, set out in a format which the company has consistently used as it believes it assists in understanding Fairfax: Second quarter First six months 2016 2015 2016 2015 Gross premiums written 2,620.2 2,052.6 4,964.2 4,116.8 Net premiums written 2,138.2 1,754.3 4,168.5 3,586.4 Underwriting profit 82.3 136.1 204.0 262.9 Interest and dividends - insurance and reinsurance 127.0 188.4 252.0 297.7 Operating income 209.3 324.5 456.0 560.6 Run-off (excluding net gains (losses) on investments) (1.1 ) 25.4 (16.1 ) 12.3 Non-insurance operations 41.9 38.6 54.2 57.3 Corporate overhead, interest expense and other (75.3 ) (100.2 ) (155.6 ) (187.5 ) Net gains (losses) on investments 229.2 (661.2 ) 69.6 (484.7 ) Pre-tax income (loss) 404.0 (372.9 ) 408.1 (42.0 ) Income taxes and non-controlling interests (165.3 ) 187.2 (220.4 ) 81.5 Net earnings (loss) attributable to shareholders of Fairfax 238.7 (185.7 ) 187.7 39.5 Highlights in the second quarter of 2016 (with comparisons to the second quarter of 2015 except as otherwise noted) included the following: The combined ratio of the insurance and reinsurance operations was 95.7% on a consolidated basis, producing an underwriting profit of $82.3 million, compared to a combined ratio and underwriting profit of 91.9% and $136.1 million respectively in 2015. The combined ratio included 3.2 combined ratio points related to the Fort McMurray wildfires (a loss of $62.6 million net of reinstatement premiums), which principally affected the underwriting results of Brit, Northbridge and OdysseyRe. Net premiums written by the insurance and reinsurance operations increased by 17.7% to $2,067.5 million, primarily reflecting the consolidation of Brit for the full second quarter of 2016 (net premiums written increased by 6.8% excluding Brit). The insurance and reinsurance operations produced operating income (excluding net gains or losses on investments) of $209.3 million, compared to $324.5 million in 2015, primarily as a result of higher current period catastrophe losses and a lower share of profit of associates, partially offset by increased net favourable prior year reserve development. Share of profit of associates of $15.2 million decreased from $116.9 million in 2015, primarily as the result of the realization in 2015 of a $78.0 million gain on a sale of properties by certain Kennedy Wilson entities in which the company is a limited partner. Interest and dividend income of $161.2 million increased from $147.1 million in 2015, principally due to increased holdings of higher-yielding government bonds and the impact of consolidating Brit's portfolio investments. As at June 30, 2016, subsidiary cash and short term investments accounted for 19.0% of the company's portfolio investments. Interest income as reported is unadjusted for the positive tax effect of the company's significant holdings of tax-advantaged debt securities (holdings of $3,828.0 million at June 30, 2016 and $5,017.7 million at June 30, 2015). Net investment gains of $229.2 million in 2016 (net investment losses of $661.2 million in 2015) consisted of the following: Second quarter of 2016 ($ millions) Realized gains (losses) Unrealized gains (losses) Net gains (losses) Net gains (losses) on: Equity and equity-related investments 23.9 (232.2 ) (208.3 ) Equity hedges (41.8 ) (163.1 ) (204.9 ) Equity and equity-related investments after equity hedges (17.9 ) (395.3 ) (413.2 ) Bonds 303.0 336.9 639.9 CPI-linked derivatives - (2.1 ) (2.1 ) Other (principally foreign currency) (11.5 ) 16.1 4.6 273.6 (44.4 ) 229.2 First six months of 2016 ($ millions) Realized gains (losses) Unrealized gains (losses) Net gains (losses) Net gains (losses) on: Equity and equity-related investments (41.8 ) (502.1 ) (543.9 ) Equity hedges (10.0 ) (303.3 ) (313.3 ) Equity and equity-related investments after equity hedges (51.8 ) (805.4 ) (857.2 ) Bonds 314.2 758.4 1,072.6 CPI-linked derivatives - (56.7 ) (56.7 ) Other (principally foreign currency) (123.2 ) 34.1 (89.1 ) 139.2 (69.6 ) 69.6 As previously announced, on December 22, 2015 the company agreed to acquire an 80% interest in Eurolife ERB Insurance Group Holdings S.A. ("Eurolife"), the third largest insurer in Greece, subject to governmental and regulatory approvals and customary closing conditions. Closing is now expected to occur in the third quarter of 2016. On June 27, 2016 the company, through its wholly-owned subsidiary Fairfax Asia Limited, agreed to acquire an 80% interest in PT Asuransi Multi Artha Guna Tbk, an Indonesian insurer. The transaction is subject to customary closing conditions, including various regulatory approvals, and is expected to close by the end of the fourth quarter of 2016. On July 6, 2016 the company agreed to acquire a 100% interest in Zurich Insurance Company South Africa Limited, a South Africa and Botswana insurer. The transaction is subject to customary closing conditions, including various regulatory approvals, and is expected to close by the end of the fourth quarter of 2016. The company held $1,523.1 million of cash, short term investments and marketable securities at the holding company level ($1,478.2 million net of short sale and derivative obligations) at June 30, 2016, compared to $1,276.5 million ($1,275.9 million net of short sale and derivative obligations) at December 31, 2015. The company's total debt to total capital ratio increased from 21.8% at December 31, 2015 to 23.2% at June 30, 2016. At June 30, 2016 the company owned $112.4 billion notional amount of CPI-linked derivative contracts with an original cost of $668.2 million, a market value of $227.3 million, and a remaining weighted average life of 6.1 years. The majority of the contracts are based on the underlying United States CPI index (52.8%) or the European Union CPI index (40.2%). ($ in millions) Underlying CPI Index Floor Rate (1) Average Life (in years) Notional Amount Cost Cost (2) (in bps) Market Value Market Value (2) (in bps) Unrealized Gain (Loss) United States 0.0% 6.2 $46,725.0 $287.2 61.5 $80.5 17.2 $(206.7 ) United States 0.5% 8.3 12,600.0 39.7 31.5 82.6 65.6 42.9 European Union 0.0% 5.4 45,187.9 297.4 65.8 56.3 12.5 (241.1 ) United Kingdom 0.0% 6.4 4,411.4 23.2 52.6 1.8 4.1 (21.4 ) France 0.0% 6.6 3,499.5 20.7 59.2 6.1 17.4 (14.6 ) 6.1 $112,423.8 $668.2 $227.3 $(440.9 ) (1) Contracts with a floor rate of 0.0% provide a payout at maturity if there is cumulative deflation over the life of the contract. Contracts with a floor rate of 0.5% provide a payout at maturity if cumulative inflation averages less than 0.5% per year over the life of the contract. (2) Expressed as a percentage of the notional amount. At June 30, 2016 common shareholders' equity was $9,419.1 million, or $406.07 per basic share, compared to $8,952.5 million, or $403.01 per basic share, at December 31, 2015. Fairfax holds significant investments in equity and equity-related securities. In response to the significant appreciation in equity market valuations and uncertainty in the economy, the company has hedged its equity investment exposure. At June 30, 2016 equity hedges represented 115.3% of the company's equity and equity-related holdings. The increase in the equity hedge ratio from 88.1% at December 31, 2015 primarily reflected additional short positions in equity and equity index total return swaps and unrealized depreciation of equity and equity-related holdings. The market value and the liquidity of these hedges are volatile and may vary dramatically either up or down in short periods, and their ultimate value will therefore only be known over the long term. There were 23.2 million and 22.3 million weighted average shares outstanding during the second quarters of 2016 and 2015 respectively. At June 30, 2016 there were 23,195,480 common shares effectively outstanding. Unaudited consolidated balance sheet, earnings and comprehensive income information, along with segmented premium and combined ratio information, follow and form part of this news release. Fairfax's detailed second quarter report can be accessed at its website www.fairfax.ca. As previously announced, Fairfax will hold a conference call to discuss its second quarter 2016 results at 8:30 a.m. Eastern time on Friday, July 29, 2016. The call, consisting of a presentation by the company followed by a question period, may be accessed at 1 (800) 857-9641 (Canada or U.S.) or 1 (517) 308-9408 (International) with the passcode "Fairfax". A replay of the call will be available from shortly after the termination of the call until 5:00 p.m. Eastern time on Friday, August 12, 2016. The replay may be accessed at 1 (800) 879-1871 (Canada or U.S.) or 1 (402) 220-4708 (International).

http://s1.q4cdn.com/579586326/files/doc_financials/2016/2015-Shareholders'-Letter.pdf I thought it deserved a new thread

http://s1.q4cdn.com/579586326/files/doc_news/2016/PRFFH-Feb-16-2016-YE-2015-Results.pdf

What will happen tomorrow in US stock market. Watsa from his 2013 annual letter. Quoting Gary Schilling the grand disconnect”. This “disconnect” or gap will be closed by either eco- nomic fundamentals rising to meet the financial markets or the markets coming down to meet the fundamentals. We think that the latter is likely and that the Fed has simply postponed the inevitable by its QE1, QE2 and QE3 actions.

We continue to worry about the unintended consequences, and continue to hedge our common stock portfolio for the reasons discussed in our last few Annual Reports. Just to highlight a few of them: 1. The U.S. total debt/GDP ratio is at a very high level and significant deleveraging is yet to come. This applies to Europe and the U.K. also. 2. Economic growth in the Western world is still very weak in spite of huge monetary and fiscal stimulus by the Fed and the ECB. In nominal and real terms, annually since 2009 the U.S. only grew by 3.9% and 2.3% respectively (while Europe grew by 1.6% and 0.5% respectively). In spite of this anemic growth, after-tax profit as a percentage of GDP in the U.S. is at the highest level of the last 60 years. 3. Inflation in the U.S. and Europe, after five years of huge fiscal stimulus, is still in the 1% area – and falling. We remind you that it took five years after the stock market crash in 1990 before Japan saw deflation – and this deflation continued for most of the following 19 years. 4. QE1, QE2 and QE3 have helped the financial markets but have not worked in the real economy. What happens when everyone realizes that the Fed and the ECB have no more bullets?! 5. There is a monstrous real estate and construction bubble in China, which could burst anytime. It almost did in 2011 but China increased its credit growth significantly since then. 6. Reaching for yield continues everywhere, with junk debt at record low yields, emerging market debt in U.S. dollars at very low yields and corporate bonds at very low spreads. Many emerging market countries also have significant external debt in foreign currencies. All vulnerable to a ‘‘risk off’’ run on the bank! In the last few years we have discussed the huge real estate bubble in China. In case you continue to be a skeptic, here are a few observations from Anne Stevenson Yang, an American who has been in China for over 20 years and is the founder of JCapital Research in Beijing: 1. China added 5.9 billion square metres of commercial buildings between 2008 and 2012 – the equivalent of more than 50 Manhattans – in just five years! 2. In 2012, China completed about 2 billion square metres of residential floor space – approximately 20 million units. For perspective, the U.S. at its peak built 2 million homes in a year. 3. At the end of 2013, China had about 6.6 billion square metres of new residential space under construction, around 60 million units. 4. Yinchuan, a city of 1.2 million people including the suburbs, has 30 million square metres of available apartments – roughly 300,000 units that could house 900,000 people. This is in addition to the delivered but unoccupied units. The city of Guiyang, capital of Guizhou Province, has roughly 5.5 million extra units for a city of 5 million. 5. In almost every city Anne has visited, pretty much the whole existing housing stock has been replicated and is empty. 6. Home ownership rates in China are estimated to be over 100% versus 65% in the U.S. Many cities report ownership over 200%. Tangshan, near Beijing, is one. 7. This real estate boom could only be financed through unrestrained credit growth. Since 2009, the Chinese banks have grown by the equivalent of the entire U.S. banking system or 15% of world GDP. 8. The real estate bubble has resulted in companies extensively borrowing and investing in real estate or lending on real estate in the shadow banking system. This is exactly what happened in Japan in the late 1980s. 9. And one observation of our own: Since 2009, the easing by the Federal Reserve combined with the explosive growth in China, backed by higher interest rates, has resulted in huge inflows (‘‘hot money’’) into China. The near unanimous view that the renminbi would strengthen has resulted in a massive carry trade where speculators have borrowed at low rates across the world and invested in China, almost always backed by real estate. The shadow banking system in China – i.e., assets not on the books of the major Chinese banks – is estimated by Bank of America Merrill Lynch to be approximately $4.7 trillion or 51% of Chinese GDP. Oddly enough, prior to the credit crisis, the U.S. had $4.5 trillion in asset-backed securities outstanding or approximately 31% of U.S. GDP. You know what happened then. When the flows reverse in China, watch out! These observations remind me again of the following quote from Michael Lewis’ essay in Vanity Fair, ‘‘When Irish Eyes are Crying’’, which I wrote to you about in our 2010 Annual Report: ‘‘Real estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations. The moment people cease to believe that house prices will rise forever, they will notice what a terrible long term investment real estate has become and flee the market, and the market will crash.’’ Amen! As they say, it is better to be wrong, wrong, wrong and then right than the other way around! For those of you who believe a picture is worth a thousand words, please watch the recent BBC documentary ‘‘How China Fooled the World’’. Finally, in our 2007 Annual Report, we quoted Hyman Minsky, the father of the Financial Instability Hypothesis, who said that history shows that ‘‘stability causes instability’’. Prolonged periods of prosperity lead to leveraged financial structures that cause instability. This quote was in relation to the U.S. in 2007. It applies in spades to China in 2013! Any credit event in China will have very significant ramifications for the world economy, as China is the world’s second largest economy and consumes 40% to 50% of most commodities

Nice review of fairfax in india http://mybs.in/2RxhKPM