SharperDingaan

Just a brief add on: If going the GP route, you need to make a decision as to whether your interest is primarily as the investment, or the finance guy. You can be the finance guy in an investment business (Goldman Sach Partnership), or the finance guy in a regular business (manufacturing, etc.). Which route, depends largely upon how much hands-on involvement you want, & how you believe a business should be run to generate wealth. The typical non-invstment-business investment may be a 40-70% direct equity investment in a manufacturing facility, brewery, apartment building/hotel (in Paris, Madrid, Rome), insurance syndicate, etc - where the investment is you & 2-3 partners. You are CFO, your partners may also be some of the other LPs, there are no stock options, & the entire partnership is private. The assets are bought at/near their valuation low point, you run the partnership for a while, & ultimately sell out to a bigger player at a higher bid. The typical investment-business investment may be a time limited 10-20% stake in an existing fund business, with the proceeds essentially buying out the firms capitalized defered sales charge. If you have a partner, they will be silent, & you will be expected to grow AUM through what you bring to the table. The primary advantage is that there is an existing business, you're not building from scratch. You can of course also go between the poles, & build an investment business from scratch, as many on his board have done. Our preferance is to not concentrate our investment and personal risk in the same entity, but kudos to those who have. SD

Crip. You might want to consider setting yourself up as an everyday limited partnership. Family/friends/backers buy pref shares, receive an annual dividend, and an annual sinking fund redemption based on the the years results. You get the equity, & your loss is limited to your initial capital investment. The reality is that you cannot avoid illiquidity, but you can reduce it by buying down the exposure. If someone really needs to sell their prefs, the others/new backers get first crack at purchase, then the partnership buys them - hurting everyone equally. If you're doing well your pref share holders don't want their money back, & are usually more than happy to have the opportunity to buy more. Liquidity materially improves. As GP, you get to invest in whatever you want with minimal restriction. As long as you can pay the annual dividend, &/or fund some kind of annual partial redemption, your LP's have no say. Cheap, no fuss, but you are not a fund manager ...... SD

Couple of messages; (1) They cant buy in enough stock at the current price of 1.03. They're telling the market they're willing to pay more in $0.10 increments. FBK's additional 23M of annual EBITDA at 6x EBITDA is an extra $1.06 - so expect around 10 incremental jumps. (2) They think FBK has a probable & credible alternate to their bid, & feel they cannot sit back. The bids momentum has slipped considerably, & we would expect that ABH does not want to see any sizeable break-up fee attached to any alternate bid/combination. (3) They may have a developing short attack on ABH stock, & they need to come over strong in order to spike it. For the last few days they have had minimal Cdn trading volume, around what is supposed to be a liquid stock - & that has to be concerning. Short ABH & go Long FBK (by buying out the market) ... if you're pretty sure there is going to be an alternate FBK bid to take you out? It would appear that ABH is in trouble, & are trying to do damage control. SD

Just invited some friends over for a little winter skiing ;) SD

Keep in mind that the investors, & the owners, view of a business are not the same. As investor, we want maximum (but often low quality) EBITDA because we price off that metric; & to get it, we maximize debt & do all kinds of gymnastics to force the EBITDA multiple up - MERC & CFX being shining examples. As owner, we want BS flexibility, & high quality EBITDA. The 'discount' to the MERC & CFX approach is meaningless UNTIL WE SELL THE BUSINESS. FBK handily beats MERC & CFX on most BS metrics, & does so primarily because FCF over the peak of the cycle was diverted to debt retirement versus dividend payouts. Terrible investment for the short-term orientated investment community though, because FBK wouldn't play the game of paying a dividend & keeping the share price > 5, so that institutions could trade it. Hence, FBK's name is dirt. But ..... all of FBK's BS re-building was akin to winding up a spring, & now we have material additional EBITDA from power generation, as well as significantly higher quality EBITDA from the cost plus RBK sales. We're now only minimally sensitive to SOP prices, & our mills are more efficient - so we don't need as high a market price for our product. Our biggest exposure is our NBSK fibre supply, & the solution is really the direct purchase of a chip supplier (vertical integration). With that supply - St Feleceon may well be one of the 3 lowest cost producers in Canada. Because FBK is unloved it is also possible for FBK to buy-back their shares at prices well below IV, & fund those purchases from operating CF - benefiting long term shareholders. We (long term shareholders) get 30-40% annual compounding for some years - & then get to capitalize it if there is a take out. Hardly surprizing that 'theft' underlies part of today's bid lexicon. If FBK bought someone else's NBSK fibre, ABH's plant would be orphaned; & would more than likely eventually fall into FBK's hands for a song (ABH rationalization). ABH/FBK is just one of many combinations, & partly defensive - therefore it will require a premium. FBK is a very attractive combination to most buyers as beyond the merely operational - it can also carry the cost of its own acquisition. Even MERC could buy it, & they would be more than willing to because of the high multiple that attaches to their EBITDA. And the MERC's of the world - would make a bid - if they could also get a sizeable break-up fee to make it worth their while. Analysts/advisers are paid to push their clients case, & keep their bid 'on message' - their message. As shareholders (including FFH/Pabrai/Oaktree) we keep an open mind, & pay our senior management to demonstrate the alternatives. As long as we can collectively exit, it doesn't have to be ABH that takes it. SD

Uccmal, twacowfca: We do something similar. Cash/margin on one-end, 3-4 equities on the other. Synthetic hedging instead of options, capital withdrawals instead of FI, & we deliberately do not work in the investment industry. Amusingly, we've also had the LEAP experience. SD

Just another log for the fire ... If FBK wanted to be REALLY hostile - all they have to do is short-sell sufficient ABH, & use the proceeds to tender for enough shares of FBK (at what they determine the Market Price to be) to force ABH into a compulsory bid - at a premium. It doesn't violate the tender conditions, there is nothing ABH can do to stop it (FBK's BOD decides, the BOD does it based on the independently valued alternatives presented, & FBK's shares are illiquid in volume), FBK shareholders (including FFH/Pabrai/Oaktree) get a short gain on ABH's falling price increasing the premium for their remaining shares, & FBK's management gets the satisfaction of forcing ABH to cover their short. Competing offers (with a break-up fee) to substantiate the market price, & pull the trigger. FBK shareholders get more $ value, & a lot more ABH shares as the ABH share price is also lower. ABH gets happy shareholders, & an elegant end to the whole sorry episode. We're happy to take all ABH stock (& would prefer to) - but we're going to get paid for it. We get paid most, & with the least risk, if ABH is forced into a compulsory offer ;) Consolation prize is to flip the shares into the competing offer (if ABH withdraws) & buy in ABH directly at the depressed price ;) No matter what, as FBK shareholders we get paid - & we get paid very well. ...... which is the whole point of this bid. SD

Cardboard, agreed the purpose of the bid is to show value, as of today. However, FBK’s management is required to ‘fight the ship’ & maximize TODAY’S value any way they can - & that includes acquisitions, joint ventures, asset sales, share buy-backs, poison pill share issuance, etc. As owners, we compensate management to do exactly this under change of control conditions, & we certainly cannot fault them for their actions taken to date. But also as owners, if we dislike the possible long term outcomes, we are free to sell at today’s MAXIMIZED price & buy something else if we so choose. It is in both the FBK’s owners, & its managements, interests to get the highest price possible TODAY - & if ruffles feathers, so be it. Agreed that the spiking of opposing actions is not unusual, but expect a no holds barred hockey game – spearing, slashing, charging, & concussion are all fair game in grudge match pond hockey. We have refereeing because it’s too easy to get badly hurt, & Quebecois players have seldom been ones to back away from a fight. Fundamental to FFH’s deal flow is the reputation for dealing fairly in small to mid-sized companies when it is very easy for them to abuse their privileged position; & so much so that FFH cannot afford to wear any whiff of insider trading. FBK does not need to prove insider trading in a court – it is sufficient to release corroborated evidence into the public domain in defence against the hostile bid, & then publicly draw on that evidence to support reasonable claim(s) of insider trading. The purpose is to deliberately hurt FFH’s business by attacking FFH’s future deal flow, & smearing FFH with the allegation. FBK just needs to publicly show that this is how FFH sometimes treats its partners, & it could be you – they don’t need to win a court battle. The use of ABH stock as currency is a key variable; The ABH name would appear to smell in too many of the wrong places, & the obvious targets are its Quebec cutting rights & its senior management. It is very easy for the Province of Quebec to change cutting rights rules, they can do it very locally, & NDP politicians are in the business of getting re-elected. FBK needs to sell the powers that be on putting ALL the cutting rights around St Feleceon up for auction – & if ABH doesn’t pay an inflated top $ to keep those rights - & gives up it plant; FBK will be more than willing to save those jobs in return for a break on the auction price. Credibly threaten ABH’s Quebec cutting rights, & the ABH share price will fall. ABH’s senior management were good for the BK restructuring, but now they are a lightning rod. They have exposed shareholders to what could be a significant damage settlement, & exposed their key backers to allegations of insider trading ... so far. Credibly threaten the replacement of ABH’s senior management, & the ABH share price will fall. So far the ABH share price is barely > 14 ... 10% below where they started, & still falling. ABH stock is highly exposed to short selling. Selling today in anticipation of a damaging FBK defence further depressing the ABH share price. Then add to it, a possible increase in dilution resulting from a higher &/or follow-up bid price. And the more ABH shares decline in price ... the greater the run on the shares, & the more pressure to replace senior management. Highly damaging to all, but it will MAXIMIZE today's price for FBK. Or they can all act like adults - & kiss & make up (for terms) before it gets out of hand. SD

Very, very nice ... (1) p12 - Incremental 12M of EBITDA from power generation. p 14 - Incremental 7M of EBITDA from RBK. (2) p14 - it appears that this bid was to stall an acquisition .... FFH was aware of it, & was acting on insider information. It may have been inadvertant but it was illegal, & it was used coercively to stop an FBK value generating acquisition - BIG, BIG DAMAGES. (3) ABH, & the lock-up group (by association), have been shown to be misrepresenting information (cutting rights). They also appear to have been attempting theft through the use of inside information - as they may well have been aware of the potential EBITDA magnitude from the power generation & RBK contracts - SETTLEMENT MAGNIFICATION (4) This is the 2nd time ABH has been caught abusing its position - first time out it was 6M for breaking the wood chip supply agreement. A very dangerous position for a company that doesn't have many provincial friends, & which appears to have a habit of abusing the smaller players. 10 MINUTE PENALTY ? (5) At this point the bid is still live, but it is effectively stalled. Implementing the poison pill will also make it very difficult to get over the 66% Damages can be settled - & they settle quickly & favourably when there are whiffs of possible insider trading. The question is what do we want as compensation ? Might we humbly suggest that we want ABH's St Feliceon wood chip facility at a dirt cheap price ;) ... And for the right price we can all be friends again - & avoid a whole lot of very bad press, penalty time, & embarrasment ;) It's a bad time to be shy, & the clock is ticking. SD

Up 5% The good: (1) Volatility hedging under leveraged conditions saved our butt. (2) Ongoing focus on risk reduction. The bad: (3) Not periodically re-evaluating an investments premise (FBK). The lucky: (4) Withdrew 45% of the chips in May just ahead of the more extreme Euroland volatilty. We would have had negative returns if we were still working with this capital. Lessons learned: (5) Annual returns for the next few years will not reflect the declining risk in the underlying portfolio. We hold sizeable weightings in (mostly) high quality equities (MFC, PD, NEM, FBK/ABH) at cost bases well below market, & funded with a growing portion of house money. Going forward, Year-on-Year return will be primarily a measure of how well we are recovering our initial investment. (6) Its OK to let equity weightings grow downwards by redeploying recovered investment to T-Bills/Margin reduction. SD

A simple numbers example to illustrate how FBK could force a compulsory offer. -Assume the offer group tenders 112M shares (86%) of all the shares at the $1/share offer. They have FBK minority shareholders - but they dont have to buy them out. -FBK makes an issuer bid for 6.5M (5%) shares at an assumed FMV of $2.50. Total cost of 16.25M, but the price in the market in $2.50, & the share count is now 123.5M. The tender group has 91% & is compelled to make a compulsory offer at a premum to market - which FBK has established as $2.50/share. The minority gets bought out for cash. SD

Jets we'll agree to disagree: - Forcing a compulsory offer is a 2nd step plan. In our example it is just FBK doing it. - We have read the agreements. Nothing prevents any of them from warehousing additional purchases through somebody else; a very common practice to evade lockup restrictions. - FBK doesn't need to do a levered recap. They just need another buyer (them) buying a significant number of shares on the open market, at FMV - to establish FMV as the market price. 5-10M shares at FMV is easily within their credit line capacity. - We both do not know what FBK is going to to, & they still have a lot of options. SD

We are voting right now - as you vote by either selling your stock at $1 - or holding on in the expectation that the bid will stall at < 90%, & you will receive a higher offer. The lockup only applies to the 45.7%. Additional shares purchased by the group that are not part of the agreement - do not have to be tendered. The king makers are sitting in excluded entities. To get out. All FBK need do is deliberatly break a condition. Or put in an issuer bid for enough of its own shares at FMV to force ABH into a compulsory offer. SD

We might all want to keep the following in mind: (1) Just because FFH/Oakmount/Pabrai could vote what they've bought since lockup - does not mean that they will. After FBK's management presents the independent valuation of FBK, all they need do is voluntarily abstain. (2) To really benefit, we need to accept ABH stock to get full capture of FBK's IV, & then retain ABH as it delevers &/or sells off FBK mills. In the interim, we are all quite free to sell our FBK today at $1, sell our ABH right after we receive it, or sell our ABH some time later. (3) Most would argue that FBK will be materially more profitable, & a less risky investment, were it part of ABH. The bid is solely about how much ABH we should receive for our FBK, & FBK management is required to independently & credibly demonstrate the FMV range of FBK. (4) To date we do not have a FMV range for FBK. All that we know is that it is higher than the $1/share offered, but is it $2, $3, etc. To have the ABH discussion we first need to know the FMV of FBK. The angst is because the clock is ticking, & FBK's management has not yet put forward its alternatives. Let the strategic committee do its thing, & save the speculation until we have the full picture. SD

Keep in mind that most would expect the judicial FV to be the FBK determined FV as there is/will be (1) Independent & credible evidence that the bid undervalues, & (2) Independent & credible evidence of the reasonable FMV range (at a higher price). Everybody gets the highest price (if they haven't sold on the market). Shares allready tendered get the higher price because the original terms of the tender (price) have been broken. Shares not tendered receive the higher offer directly, & all shareholders receive the compulsory tender premium. Lockup generally does not affect the price received, it just guarantees a minimum of X votes in favour. The lockup group directly benefits from a price hike. (1) The sellers get more value for their stock, & (2) influence the cash/stock mix + any related premium. (3) The buyer gets assurance that they can issue some of their shares as currency, & (4) possibly go all equity if there are favourable statements. ABH & FBK shareholders benefit massively if it is an all equity deal. The ABH D/E ratio drops immediately to around 14%, from 16%, & roughly zero (via defeasance) if the RBK plants are then sold off. But it's $15/share - until FBK shareholders accept the offer, & those RBK plants are sold. Given that the FFH forestry portfolio could well revalue upward by $1B+ once its over, it is not hard to see why FFH put FBK into play. SD

The process is essentially as follows: (1) Bidder gets an accept with > 66 2/3% of the voting stock. Sellers tend into the offer (2) At 90% dissenting shareholders tender to a trust which tenders to the bidder. Consideration is the bid price + a judicial FV evaluation. Judge decides & dissenters get paid any additional difference between the judges/FBK's FMV evaluation, & the bid price. (3) Bid stalls if > 10% refuse to tender, as the buyer cannot compell the minority to sell. Buyer either (a) accepts minority interest (unlikely) or (b) pays a premium to FMV to force the dissent position to <10% (ugly process) & engage the complusory action. The realities of the FBK bid are largely as follows: (4) The buy-out group probably has between 66 2/3% & 90%. They could force a vote at the current terms, but it is unlikely that they can force a compulsory tender. Therefore, ABH has to make the minority an offer at FMV + a premium to force a compulsory action. (5) The FMV is being determined by FBK & its advisors. There will be some discussion between buyer & seller, but ultimately FBK will make a announcement as to what the FMV range for FBK is, & that is the price the judge will use if he/she is required to decide. (6) ABH wants to use ABH stock in at least part consideration - but ABH will have to pay a premium for doing so. The buy-out group will largely decide how much of a premium- & it will be a function of ABH's future prospects, liquidity, & the posibility of ABH ultimately walking away. (7) Although compulsory tender premiums can be material, they are negotiated, & it is usually on an artifically low base. What does it mean: (8) Numbers example using Q3/2011 as the base: Q3/2011 BV/Share = (350,575/130,076) = proxy for Q3/2011 FMV = 2.70 Premium for ABH shares vs cash = assumption = 10% Compulsory tender premium = assumption = 5% - Price for FBK, if paid for with ABH stock = approximation = 2.70*(1.10) = 2.96 - Price for FBK, to get a compulsory tender = approximation = 2.96*(1.05) = 3.11 - ABH equity issue for approximately 405M Considerations: (9) Most would agree that ABH/FBK is the best combination, & that the synergies would be both material & readily realizable. While there are other possibilities the issue for this combination has really always only been price. Readily fixable. (10) The lockup group put FBK into play for a reason. Most would think the demonstration on how to release value, additional ABH stock at low cost, & a match to industry consolidation are exceptionally good reasons. Always nice to see the masters at work. SD

Keep in mind that Sears has 4 main assets & 1 major liability. Real Estate. The asset is the selling space, not the land. Most of the stores are dirt cheap leases for anchor tenancy in the traditional mall - & as long as Sears stays open, the mall operator will basically give them the mall. Quality or crap, they get paid to fill the store - & Sears gets ongoing brand awareness, for essentially no cost. Product Lines. 3-4 lines already mentioned - but aside from HomeSense, there is really no need for storefront. Selling Mastercraft, etc. under licence, & directly on-line, will do the same thing without the headcount & overhead. The art is in doing it slow enough that the real estate continues to at least break even during the transition. Cards. Biggest & best asset. Retailing exists almost solely to drive card balances. Higher pricing exists almost solely because Sears will give you the credit. Higher run-rate write-offs offset with higher pricing; but the game stops if everyone suddenly cannot pay – at the same time. Not that likely if Sears is the only store giving you credit. Retailing. The asset is the rent spread between what a brand name pays & what Sears pays the mall. Put bluntly the stores are upscale flea markets - the booths just don’t have walls, & are a little bigger, brighter, & more glam. As long as they can still make the minimum spread, what they fill the store with is largely irrelevant. Brand. The department store that your parents &/or granny goes to - & primarily because that is what they grew up with; every other generation goes to the boutique &/or big box. No real future when much of your clientele is either getting rid of stuff (down-sizing) or too immobile to even get through the door. Summary: Sears is really nothing more than a finance company that is being asset stripped. Card income slowly being converted to royalty income, & assets being set-up for liquidation at opportune prices. A very tough & uncertain way by which to make a $. SD

Simplest to just buy the fund class with the worst 1yr record (Greenblatt), & hold it for 1-2 Yrs. You're really betting on mean-reversion. Today's star being replaced with another, the popularity order getting re-arranged, & todays unpopular choice rising a rung or two on the backs of tomorrows dogs. You're also buying the class (ie: todays global equities) on the expectation that all boats in that class will eventually rise with the tide. Even the dog in the class will rise with the tide. SD

Merry Xmas to all! SD

We used the average for the last 15 quarters from Q3-2011 through Q1-2008. Timeline covers both the peak & trough of the cycle, & starts 1 yr after the RBK mills came on board to minimize any acquisition disruption from those mills. It should approximate the average run-rate for FBK over a cycle. Using Q3/2011 #’s: S&A (3681)/Revenue (138267) = 2.66%. Delivery (10320)/Revenue (138267) = 7.46%. Total S&A + Delivery for Q3/2011 = 10.12%. The major variable affecting S&A & delivery is total revenue; as most of the expense is fixed cost. Q3/2009 & prior - delivery cost were part of S&A; affects attribution, but not the total S&A & Delivery cost as a % of revenue. We would expect that synergy’s would reduce the fixed cost embedded in S&A & Delivery. Not concerned re FBK’s 2013 cutting rights as we don’t expect FBK to be independent. If they are part of ABH they will not be squeezed (all else equal). Same thing if FBK is privatized & resold to another major. They are going to get the wood. Merry Xmas. SD

Agreed re the disparity on the plant valuations. On a purely theoretical basis the lowest price should be the Q3-2011 BV, as after netting - the equity consists almost entirely of the mill BV's, & those BV's are impairment tested under IFRS every year. What is being missed here is 1) that in relative terms FBK is a lot better than ABH (hence Steelhead), & 2) what the ABH ratios look like with a +/- 350M equity issue. Should be interesting .... SD

lessthaniv: Keep in mind that ABH may well not have the practical ability. (1) FBK was deliberately put into play by FFH - & without the FFH shares in lock-up there would be no bid. If ABH is not seen to pay fair value for FBK they screw their biggest shareholder (s?) out of a significant number of additional ABH shares, & those shareholders have the shares to put ABH itself into play. (2) ABH is also not competing against itself - it is competing to get the largest possible equity issue under the best possible terms. ABH needs the D/E improvement to build up its war chest. (3) If ABH could force a vote, it would allready have done so. We rather suspect that if ABH forces a vote, & the minority votes no - the shares come out of lock-up. We also suspect that whatever shares the lock-up group has bought post announcement; are not subject to lock-up - & will be excluded from the vote. Minority shareholders will decide the outcome (friendly), but the lock-up group will retain the abiity to force a privatization should they so wish (fairness). Elegance. Nnejad: Plot the quarterly pulp price & capacity utilization for FBK since the ABH spin-off. The median NBSK price is 776-800/ton at 98-99% utilization. The median RBK price is 731-740/ton at 98% utilization. Today's pulp pricing level is the norm under which these mills operate. ABH controls the major NBSK margin cost (woodchips), & 33-50% of the RBK has no margin risk as it is sold under cost+. The ABH delivery & S&A costs should also be far lower than the 7.6% of revenue that FBK currently pays ... & all before the additional synergies that ABH is expected to extract. .... Overall we see no real strategic reason why the acquisition would not go ahead, baring a price & currency change. But it does seem that the advisors are a couple of steps behind FFH's elegance. SD

Keep in mind that Prem is talking the long view - & doing so for a reason. A cynic would note that ABH might well be floating the idea of swapping the roughly 120M+ of cash in this deal (71M in the offer + 50M from FBH credit lines) for ABH stock. Because if the deal settled at $2+/share (or higher), ABH would get an equity issue of 260M+ & materially improve its D/E ratio. Given that it is highly unlikely that ABH could do an equity issue for 260M+ of cash in todays market - for the same number of shares - there is a need to persuade FBK shareholders as to the merits of ABH stock. A cynic might also highlight what junk TODAY'S ABH share currency actually is - & that this deal is being done TODAY. We may well all agree that over the long term ABH should be worth a lot more, but TODAY a FBK shareholder is being asked to swap a stronger credit for a much weaker one. When you want your counterparty to re-assign to a lower credit, you have to pay for the priviledge. A cynic might also note that in a commodity downturn FBK is not only the lower financial risk, but it also has the cash to buy back its own shares. Furthermore, Prem & Coy have so many shares of FBK, their only real exit is to take FBK private. There is a lot more market risk to holding ABH than there is to holding FBK, & for a FBK shareholder to take on that risk - you have to pay for the priviledge. We would actually prefer to take all ABH stock, & agree with Prem that we would expect the ABH holding to double its value within roughly 1.5-2 yrs. Most others would probably take a similar view - but ABH is going to have to add something for FBK improving their Balance Sheet ;) SD

Quebec: Keep in mind that there will be a range of values. The lower values will be based on liquidation comparables, the mid & upper values will reflect going concern comparables which will include the power generation, labour peace, & a premium for the lower contribution margin risk from the cost plus contracts. Most would expect that the focus will be almost entirely on the strength, trend, & quality of the forward EBITA - & what multiple you should pay for that quality & stability. The (synergy) negotiation will be over the cost of woodchips (ABH controlled), & improved efficiencies (ABH determined) post sale. Material $ involved. The (assumed) refinancing penalty is also not a obstruction (deduct penalty from the sale price & get the PV of the future interest saving over the remaining term of the debt). It does not mean that ABH will want to pay; but it does mean that it will be difficult for ABH to materially disagree, especially as ABH is part paying with stock - ABH is not Cascades or Canfor, & neither of those two has the capital & debt restrictions that ABH has. Every day horse trading at this point. SD

Quick & dirty .... Prior to the rights offering: 17,443,300 @4.50 [assumed average] ($78,494,850)+7,635,495 @1.01 ($7,711,849) + 8,549,506 @ 1.01 ($8,635,001). Total gross investment of approx $95,241,700. Bid itself at time of launch: Assume 1 in every 3 shares of the missing % ownership. 8,598,233 @ 1.01 ($8,684,215). Total net investment of roughly $100,000,000 (gross of $103,925,915 less $3,925,915 fees/distributions received over the years. Ave cost of $2.37. Bid since launch: Assume 67% collective ownership with 1 in every 3 shares of the additional % 9,225.666 @1.01 ($9,317,923). Total net investment of 109,317,923. Ave cost of $2.12. Assume the max investment is approx $110M, & add an additional $1.5M of aggregate capital recovery, with all the funds invested at 1.01/share. Additional 2,160,472 shares. All-in average cost of +/- $2.05 The wild cards are how 1) many of these additional shares is FFH buying? ; if FFH is taking > 1/3 of them, their cost is lower 2) how much of the arbitraging around the rights issue was FFH responsible for?; if they did around 16M shares at an average spread of $0.45 they reduced their cost by around $7.2M. Conclusion: 1) At about $2.05-$2.12 FFH gets out without a loss, 2) It is about double the intial price, 3) It is around the same number that many others are coming up with. SD