nwoodman

Thanks for posting. Some comments from the CEO of AGT https://www.bloomberg.com/news/videos/2017-07-26/agt-food-gets-vote-of-confidence-from-fairfax-video sounds like this one has been in the works for a while cheers nwoodman

Break fee and a second chance? http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11895162 cheers nwoodman

FWIW revised ratings on Allied World post merger Moody's https://www.moodys.com/research/Moodys-downgrades-Allied-Worlds-ratings-following-acquisition-by-Fairfax-outlook--PR_368998 S&P http://www.intelligentinsurer.com/news/s-p-cuts-allied-world-post-acquisition-by-fairfax-12487

Fairfax India closed on the 10% acquisition from GVK, now officially own 48% of BIAL http://www.fairfaxindia.ca/news/press-releases/press-release-details/2017/Fairfax-India-Acquires-an-Additional-10-Interest-in-Bangalore-International-Airport-Limited/default.aspx

Closed http://www.fairfax.ca/news/press-releases/press-release-details/2017/Fairfax-Financial-Successfully-Completes-Acquisition-of-Allied-World-and-Closes-Exchange-Offer/default.aspx

Some articles that may be of interest in determining the validity of BIAL as a toll bridge 1. Commentary on an alternative airport in Hosur: (i) "Due to the presence of IT and IT Enabled Sector (ITES) firms in the south and east of the city, Hosur Airport would have been a natural choice if Bengaluru was to get a new airport. " (ii) "BIAL, along with its counterpart Hyderabad International Airport Limited (HIAL) have an exclusivity clause in their agreements. Clause 5.2 of the concession agreement states: Exclusivity International: No new or existing airport shall be permitted by GoI to be developed as, or improved or upgraded into, an International Airport within an aerial distance of 150 kilometres of the Airport before the twenty-fifth anniversary of the Airport Opening Date. Domestic: No new or existing airport (except for Mysore and Hassan airports) shall be permitted by GoI to be developed as, or improved or upgraded into, a Domestic Airport within an aerial distance of 150 kilometres of the Airport before the twenty-fifth anniversary of the Airport Opening Date. https://swarajyamag.com/infrastructure/hosur-airport-may-not-be-able-to-solve-south-bengalurus-woes 2. Rail access to the airport has been approved (whatever that means in terms of timing): (i) "As if there isn't enough traffic in Bengaluru already, a commute to the city’s airport is close to a nightmare for those living far from it. In most cases, flying from Bengaluru to another city and beyond takes lesser time than commuting from one's house to the airport -- that is how far it is!" https://swarajyamag.com/infrastructure/bengaluru-suburban-rail-10-possible-rail-routes-to-decongest-indias-silicon-valley (ii) BEGALURU: The Metro link to Kempegowda International Airport (KIA) inched closer to realisation, with the Bangalore Metro Rail Corporation Ltd (BMRCL) calling for tenders to take up land and property survey along the proposed route - from Nagawara to KIA.BMRCL proposed five possible routes to KIA, and sought public opinion on the same. Subsequently, the Nagawara-Jakkur-Yelahanka line that runs parallel to Ballari Road was finalised for the Metro link. http://timesofindia.indiatimes.com/city/bengaluru/bmrc-sets-ball-rolling-on-metro-link-to-airport/articleshow/59262506.cms

A Pity, but good to see them having the discipline to walk away and not overpay https://www.dealstreetasia.com/stories/catholic-syrian-bank-fairfax-deal-collapses-valuation-76329/

Right back at ya ;) http://www.newindianexpress.com/cities/bengaluru/2017/jun/23/industries-minister-deshpande-snubs-energy-minister-shivakumar-over-gvk-group-stake-sale-1619899.html

Reform in India keeps rolling on.... https://www.nytimes.com/reuters/2017/06/29/business/29reuters-india-tax-logistics.html

Surprised the break fee was only $2m but along with costs of $400,000 they shouldn't be out of pocket https://www.interest.co.nz/insurance/88543/fairfax-financial-holdings-leaves-aussie-insurer-bid-even-larger-share-new-zealand

Michael Wacek, VP & Chief Risk Officer at Odyssey Re, has also picked up 500 shares SVTItdOneLineDetailDerivIns_-_Wacek.pdf

Perhaps, but the Tower shareholders have now seen a 77% pop from the February price. not bad for 4+ months. -Crip Fixed it for you ;)

Glad to see they didn't get into a bidding war over this one https://www.reinsurancene.ws/suncorp-beats-fairfax-tower-acquisition-increased-offer/

Some links regarding Digit (formerly Oben), Fairfax's (45% holding) insurance start up in India http://godigit.com/ https://www.linkedin.com/company-beta/18073064/ (June 2017) "The company, which has already received preliminary approvals from the Insurance Regulatory and Development Authority of India (IRDAI), will start with a paid-up capital of Rs 385 crore ($US60m). Fairfax Holdings will control 45% of the firm while the balance will be held by Indian investors led by Goyal, who will be chairman of the bank..... ....Speaking to Times of India (TOI), Komaravelly said that the plan is to launch within the next 6-12 weeks, subject to final approvals from IRDAI. "We want to bring about a change in insurance. The differentiation is from the point of view of making the entire experience for the customer seamless," he said. "We are based out of Bengaluru because it has the right culture for startups and also we will be using technology extensively." http://timesofindia.indiatimes.com/business/india-business/fairfax-to-back-general-insurance-startup-digit/articleshow/59124968.cms?TOI_browsernotification=true (March 2017) IRDAI wants reduction of stakes by Fairfax in ICICI Lombard before the regulator considers the second level of approvals — known as R2 — for the new joint venture Oben Insurance. The second stage approvals for Oben Insurance, according to sources, is at least three months away when IRDAI board will meet. http://indianexpress.com/article/business/companies/fairfax-gets-preliminary-irdai-nod-for-2nd-insurance-venture-4561044/ "A Fairfax backed company, started by Kamesh Goyal, Digit is here ‘To Make Insurance Simple’. With that as our mission, we are reimagining products and redesigning processes. We are going back to the basics and building simple and transparent insurance solutions, that matter to people. We call our employees, ‘Simplifiers’ because that is their ultimate goal here. Our Chief Simplifiers are from insurance, tech and e-commerce, helping us shape this digital-first company. " https://www.linkedin.com/company-beta/18073064/ "After 30 years in the industry, living and breathing insurance, I feel time is ripe to change the status quo. The Insurance industry has seen lots of changes in the last fifteen years in India. Most of the changes are related to making companies more efficient and processes better. However, unlike other sectors we have not seen Insurance companies redefining the customer experience." http://godigit.com/why-i-started-digit/ An article on another Indian insurtech company, Acko, that is also pursuing an R2 license https://techcrunch.com/2017/05/24/acko-is-an-ambitious-digital-play-to-disrupt-indias-10b-insurance-industry/ cheers nwoodman

The performance fees are calculated on a 3 year basis so the first performance fee should be paid at the end of this year From the Q1 FIH report (BVPS $12.50): The performance fee is accrued quarterly and paid for the period from January 30, 2015 to December 31, 2017 and for each consecutive three-year period thereafter, and is calculated, on a cumulative basis, as 20% of any increase in common shareholders' equity (including distributions) above a 5% per annum increase. The amount of common shareholders' equity at any time which must be achieved before any performance fee would be payable is sometimes referred to as the "hurdle per share". The company determined that a performance fee of $45,941 should be accrued for the first quarter of 2017 as the book value per share of $12.50 (before factoring in the impact of the performance fee) at March 31, 2017 was greater than the hurdle per share at that date of $10.98. If a performance fee is payable for the period ending on December 31, 2017, it will be paid in subordinate voting shares of the company unless the market prices per share of those shares is at least two times the then book value per share, in which event Fairfax may elect to receive that fee in cash. In the first quarter of 2017, the performance fee recorded in the consolidated statements of earnings was $44,571 (2016 - nil). Not sure what will happen in terms of revaluing their stakes in BIAL, but simplistically if the share price is tracking NAV, then they have exceeded the hurdle of 10*1.05^3= 11.58 => Out performance 16-11.58=4.42/share 20% Fee = 0.884/share Shares out 140m Performance Fee = $123m I am sure it won't wash through completely but the point is FIH has the potential to make a bucket load of money for them. Fairfax can run their holding from the current 30% of FIH up to 49% after that it is to be paid in cash. Not difficult to see them reaching that level of ownership relatively quickly cheers nwoodman

Nice summary and worth a read Fairfax Financial’s Evolution to Global Player http://www.economicswire.net/fairfax-financials-evolution-to-global-player.html

Thanks, for the update. Do you have a reference for the other jurisdictions mentioned? Arkansas Approval http://www.insurance.arkansas.gov/news/2017/jun/19/kerr-approves-1b-acquisition/ New Hampshire Approval http://www.nh.gov/insurance/legal/documents/order_alliedworldacquisition06.22.17.pdf OMERS - not related to the above https://www.nh.gov/insurance/legal/documents/nh_forma_omers_alliedwld.pdf Looks like the Delaware hearing is scheduled for next Tuesday http://insurance.delaware.gov/wp-content/uploads/sites/15/2017/05/public-hearing-regarding-individual-licensee-fairfax-UPDATED.pdf Cheers nwoodman

The Arkansas Insurance Department has approved the acquisition of two domestic affiliated companies, Allied World Surplus Lines Insurance (AWSLIC) and Vantapro Specialty Insurance Co., by Swiss and Canadian companies............The acquisition must still be approved by Delaware, New Hampshire, and four foreign governments. http://www.insurancejournal.com/news/southcentral/2017/06/19/455052.htm cheers nwoodman

If it makes you feel better. Brian Bradstreet is also buying at these levels https://www.thecerbatgem.com/2017/06/21/fairfax-financial-holdings-ltd-ffh-director-f-brian-bradstreet-purchases-1000-shares.html cheers nwoodman SVTItdOneLineDetailNoDerivIns.pdf

BENGALURU: Karnataka's Energy Minister D.K.Shivakumar has sought the intervention of Chief Minister Siddaramaiah to block any further sale of stake by the Hyderabad-based GVK Group in Bangalore International Airport Limited (BIAL). Canadian billionaire Prem Watsa-controlled Fairfax Group has announced its plans to purchase 10% of reminder stake from the GVK Group which will pave way for GVK Group's complete exit from the international airport. http://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/karnataka-minister-seeks-to-block-gvk-groups-stake-sale-in-bengaluru-airport-to-fairfax/articleshow/59193671.cms

This could be an interesting development, especially in light of Fairfax's tilt at Catholic Syrian Bank in India http://www.independent.ie/business/irish/bank-of-ireland-ceo-boucher-weighs-up-new-role-with-billionaire-prem-watsa-35800984.html cheers nwoodman

I am getting 1.16 +/-5%. Cheers nwoodman

I certainly agree with that. Nice work and thanks for sharing. Probably irrationally, I am also willing to pay up a little for the opportunity to participate in India. cheers nwoodman

Don't disagree, but if it ultimately "converts" to yet more geographic and/or strategic coverage for the insurance ops then I would be more than happy. cheers nwoodman

This one seems to be working out very nicely. From the Independent http://www.independent.ie/business/irish/fbd-faces-battle-for-control-after-shares-soar-35687594.html and A move to more of these "paid to wait" type deals is very welcome cheers nwoodman