cwericb

“FFH is not buying FBK. FFH is selling their shares to ABH who are hoping to buy FBK. This talk about FFH not adhereing to their "fair and friendly" acquisition mantra is ridiculous. They are acquiring nothing.” That’s simply a matter of technicalities and semantics. Yes ABH is buying FBK. But Fairfax is the driving force behind the takeover, the largest shareholder of ABH, and a VP of Fairfax sits on Abitibi’s board. By no stretch of the imagination are they an unrelated party and they are orchestrating this takeover of FBK through ABH. Through ABH they are attempting to take over FBK - of which they are also a major shareholder. I know the car analogy over simplifies the situation, but the bottom line is that there are two offers and shareholders are being forced to accept the lower of the two. It is not so far astray if you look at the situation from a shareholder of FBK’s point of view. I fully agree with what you say about FBK management and I have never been a fan. I now find it ironic that their goals are finally in line with shareholders. With the agreement of the participants, could not the hard lockup price be increased if they were so inclined? If they are locked into a position that they cannot get out of, why are they perusing legal action to push the matter so hard? If they want the company, offer a fair price, don’t try to force shareholders to take an lower offer

“FFH, Pabrai, Oakmont etc are well within their rights to lock up shares to an offer” They certainly are, but the situation has changed since that time and just because they are within their rights still doesn’t mean that their offer is either “fair or friendly”. I guess that if someone goes through a red light in front of me I would be within my rights to hit him, it still doesn’t make it the "right" thing to do. The real situation here is simply that our shares are up for sale and we have two offers, one is $1.30, the other is $1.00. Related parties are colluding to force us to take a the lower offer and also eliminate any other potential offers. They voted their shares in a manner that they believed gave them the best opportunity for success at the time. Yes but that was many months ago when there was no other offer on the table. If I make an offer to buy your car for $10,000 and you say,”No that isn’t enough, I know my car is worth a lot more than that”. Then someone else comes along and says “I’ll give you $13,000 for your car”. Then you might expect for the first guy to come back with a higher offer, but when he says "I’ll still give you $10,000 for your car” should you not be free to accept the second offer? Sure in the FBK situation there are lots of technicalities involved and that is why this mess is in court. What really ticks me off is that when this gets settled, what will FBK be worth after all the expenses that they have been forced to assume?

When this all settles out, doesn’t it simply come down to a battle between Fairfax and the board of Fibrek? Initially it appeared to be a good idea to amalgamate and streamline the operations of ABH and FBK and take advantage of the FBK’s low share price. But the bid just simply didn’t fly because somebody thought they could get away with getting FBK on the cheap. But then this seemed to degenerate into an ego trip and everyone dug in their heels. Ever since, both sides have been frittering their shareholders money on what is probably a personal battle. Tere is one common factor in this battle - Fairfax. And yes business is business, but at some point Fairfax should have realized that (theoretically) they hold themselves to a higher standard and therefore they should have made a more reasonable offer rather than try to force an unreasonable offer through by any means available. Look. when one faction offers shareholders $1.00 and the other offers $1.30, nearly everyone looking at this can see who the good guys and bad guys are. Fairfax has to be embarrassed over the bad press they have received over this already so why haven’t they done something about it? While others can participate in this sorts of wars, how do you possibly justify it when you derive your name from your motto of “Fair and Friendly Acquisitions” ? Does anyone suppose that Perm will be inviting FBK’s people to the annual dinner this year?

As I was writing this I see that gordoffh had just posted something similar... The word that comes to mind to describe this mess is "bizarre”. It seems that every second day that I pick up my mail there are a couple large envelopes sitting there from one side or the other. Out of curiosity, does anyone have a count on the mailings we have received to date? I have gotten to the point where I don’t even open them anymore. The useless expense involved in these mailings alone must be horrendous. I guess it will all come out when someone writes a book about this.

Excellent idea.

Prince Edward Island

"Actions speak louder than words" Exactly. It is not that one company is trying to force a takeover at the expense of shareholders. It is that the company behind this pretends to take the high ground and even derives its name from its motto of Fair and Friendly Acquisitions when nothing could be further from the truth in this case. As has been suggested, there would appear to be something going on here that beneath the surface and perhaps at a personal level. There have been all sorts of justifications and excuses given for Fairfax's actions. Some of those might be applicable in other takeovers involving less reputable companies. But when you have of "Fair and Friendly Acquisitions" and then back an "Unfair and Unfriendly Acquisition" it definitely changes one's perception of Fairfax - and for what??

"And the fact that ABH keep using the legal process to fight for this obviously inferior offer is disgusting." Can't help but agree and if you look at the reaction in the press there is more and more criticism of Fairfax part in this. It seems so contradictory to FFH's "fair, friendly acquisitions" creed. How do they corelate their position in this takeover with their moto? Obviously the friendly aspect was missing from day one. And where is the fairness in trying to stiff shareholders out of a legitimate bid that is a full 30% higher? The costs in this mounting pile of crap I have been receiving must be horrendous. May drive up the price of paper though...

It seems this debate boils down to a single issue. Do Goldman’s employees have an ethical responsibility to their clients or is their only responsibility to Goldman’s bottom line? But clients pay Goldman, and thereby Goldman’s employee’s, to look after the client’s best interests, not Goldman’s interests. I guess I am old school but I believe that if you accept money to perform a service you have an ethical responsibility to perform that service to the best of your ability. When you take your car to the garage, is it okay for the garage mechanic to slap on numerous unnecessary parts and repairs to boost the garage’s profitability? Just my 2 cents worth.

rkbabang “...as an anarchist...” One thing I have never understood about anarchy and anarchists is what sort of society do they see themselves living in in their ideal world? I mean, taxes, law, government, etc all have their downside and we undoubtedly have too much of each, but what is the alternative? Somalia? “Taxation is theft” For sure some of it is and nobody likes taxes, but again, what is the alternative? Privatization? Do you see Wall Street as a shining example of honesty? Do you really believe that if there was no law and law enforcement that you would be able to live in any semblance of safety?

Speaking of CMHC, does anyone have any idea of total potential liability that CMHC and the Canadian taxpayer has if a meltdown occurred in housing prices?

"Owning a house is not seen as something you achieve (by saving a lot and then waiting for the right bargain), it's seen as something you have a right to (price doesn't matter, it'll go up anyways!). That's dangerous." If you mention the idea of "saving up" to buy something, people tend look at you as if you were out of touch with reality. The idea today is that you use other people's money so that you can get what you want - now - and worry about paying for it later. That is when the problem comes in - later. Eventually later comes around. Then, when they find themselves in deep it's everyone else's fault, the bank, the government, the credit card companies, etc. Here is another scary scenario. I have had people actually say to me, "We doing pretty good, we are making the minimum payments on all our cards and we still have enough credit to buy that new ....... we want. First off, I cannot believe people think of their credit capacity as an asset rather than a pending debt. Secondly, I received this month's Visa bill. Hidden on the last page (and required now by law), is the statement "if you only make the minimum payment it will take you 37 years to pay the amount owing". And my Visa bill was for only $1,770.

I have been told by real estate people that they a lot newer large houses where several rooms are sparsely furnished or bare simply because the home owners are at the limit of their budget. If you think that is scarey, read on. I am involved in the credit end of the building supply industry. When customers come in to set up a line of credit for the construction of a new home the conversation often goes like this. A well educated, well employed young couple are sitting in front of me and I say... “ Hi folks, so you are going to build a new home and all your financing is all arranged?” “Yes, everything is ready to go and our contractor is starting next week.” “Well that’s that’s great. So what is your new house going to cost?” They look at each other with a blank look on their faces and say “ Well we don’t know, but our payments will be $x,xxx per month.” “Yes well that’s fine, but do you know what the actual cost of the house will be when finished?” “Aaaaa... no, but our mortgage is $xxx,xxxx and our payments will be $x,xxx” “But what is the cost of the house?” ‘Aaaa, well I guess we never asked.” “So you really have no idea of what the house will cost?” “No, I guess perhaps we should ask, but we do know that our mortgage payments will only be $x,xxx ” “Well folks, you realize that your 3% mortgage rate could increase in five years from now when you renew your mortgage and your payments could jump substantially?” “Hahaha, well that better not happen, hahaha” This is NOT an isolated incident. The only reason I can see for this frame of mind is that these people have been brought up in a world where leasing is a way of life. They seem to equate a five year lease with a five year mortgage term. A mortgage is not a car lease. When rates rise you don’t ease into a cheaper model or walk away at the end of five years.

You guys can argue all the facts and figures you want, but perception is everything. The average small FBK shareholder sees two things. ABH offering $1.00 for FBK and MERC offering $1.30. The appearance is that FFH, as a major shareholder of FBK and ABH, is trying to force the deal through at $1.00. No small shareholder is going to be very happy with that and the perception is that FFH is trying to bully the deal through at the small shareholder’s expense and that does not help either Prem’s or Fairfax’s image.

Bought a little more today @$390. Hope it will slide over the next few weeks so I can pick up some more. Remember the bumpy forecast and FFH sure looks awfully good when the markets tank.

Part of what bothers me about this situation is what has happened to the "fair" in Fairfax? This is going to leave a bad taste in a lot of people's mouths long after this is over.

"The US operations have tax losses of ~$98M that would be lost in a transaction" Would that still be the case if the US mills were sold to a US company?

"Assuming the management doesn't do anything stupid after it falls through, of course." That's probably a generous assumption.

I was speaking to a business woman in Waterloo last week who told me that RIM owned 67 buildings in Waterloo. Apparently they occupy 1,500,000 square feet of office space in the city - 34 acres, and that is in a city with a population of a little over 100,000. Not much wonder they are concerned.

I had been wondering the same. Up 2%, down 2%, up, down, Its quite a roller coaster. I can see it trending down for a few weeks or up for a while but lately it seems to be swinging up and down on an almost daily basis.

I'm down to just 4 or 6k after dumping most at about 75 cents thinking I might buy them back lower. #$%^&*! Not tendering though.

Yeah Norm, but I still don't think Fabrice is going to get a free ticket to the annual dinner...

Taxlaw nearly took the words out of my mouth. In the first trading day of 2012 I was up by 50% of what I was up for the previous 12 months. Unfortunately not the 8% Ericopoly was up. Sure would be nice if this was the shape of things to come...

"you're smart and experienced enough to reverse engineer what they did to go -15%. you seem nonchalant about OP managing your money, having a bad year. they are not all smart. many are just good salesmen. they can be intimidating to the lay person. Were it me I would be sitting down with them, for hours if need be, and figuring out Exactly how they lost 15% of my capital. how much are they charging? what is the turnover of the portfolio? lost of questions" I have done most of what you suggest and I think the time is coming when I will have the confidence and time to manage my own investments, but for now I pretty well have to rely on someone else to do so. It also spreads the risk of my doing something really stupid :) At this point I am taking the position that I will give them a little more time, (but not much more). It is is something like the mutual fund that advertises how well it did last year. It doesn't mean that they will have a great year next year and the fund that didn't do as well may have a better chance of gains in the next year. Some of the money is invested with pretty good fund managers like Sprott and Chou so I will give them a little longer but it still ticks me off that with all their expertise, resources and information that a rank amature like myself can outperform them in both good and bad markets.

I have two portfolios. One self directed, the other “professionally” managed through RBC Dominion Securities and Foyston, Gordon & Payne. Despite some bad timing (FTR) and some gambles (RIM and TRE), my self directed portfolio was up 3%. My “professionally” managed portfolio was down 15%. I could put that negative 15% down to being aggressive, but when markets were doing better last Spring my self directed portfolio was up 6-7% while the other was only up 2-3% (at best). Unfortunately they manage 2/3 of my holdings. My financial adviser says I need to give it more time. That reminds me of the old Credit Union TV commercial where this gent comes on screen and says, “For years I went to my broker (pause) And the only thing that got broker was me.”