Daphne

Atlas today announced they have entered into a definitive agreement under which Poseidon will acquire Atlas in an all-cash transaction for an enterprise value of approximately $10.9 billion. Under the terms of the agreement, Poseidon will acquire all outstanding common shares of Atlas not owned by Fairfax, Washington and Mr. Sokol for $15.50 per share in cash. Fairfax, Washington and Mr. Sokol currently own approximately 68% of the outstanding common shares. Atlas will continue payment of all ordinary course quarterly dividends regardless of the timing of any closing. The per share purchase price represents a 34% premium to Atlas’ unaffected share price as of August 4, 2022, the last trading day prior to a publicly disclosed proposal from Poseidon to acquire Atlas.

TORONTO, Oct. 27, 2022 (GLOBE NEWSWIRE) -- Fairfax India Holdings Corporation (“Fairfax India” or the “Company”) (TSX: FIH.U) reaffirms that while its general practice is not to comment on market speculation, the Company confirms that contrary to some recent media reports, the Company is a long-term shareholder of Bangalore International Airport Limited (“BIAL”) and has no intention of selling its ownership interest in BIAL.

Fairfax shares merit consideration for investors willing to look beyond past headlines TREVOR SCOTT SPECIAL TO THE GLOBE AND MAIL In Berkshire Hathaway’s 1985 shareholder letter, Warren Buffett discussed his 1973 partial purchase of The Washington Post, which he had viewed as value hiding in plain sight, and which subsequently skyrocketed to more than 20 times his initial cost. “Our advantage, rather, was attitude: We had learned from Ben Graham that the key to successful investing was the purchase of shares in good businesses when market prices were at a large discount from underlying business values.” Mr. Buffett’s ability to ignore preconceived notions and instead focus on the underlying value allowed him to invest in a fantastic company at a bargain basement price. STORY CONTINUES BELOW ADVERTISEMENT I believe there is a similar behavioural investment opportunity currently with Fairfax Financial FFH-T +5.00%increase , a US$11-billion Toronto-based property and casualty insurer that is being punished today for the sins of its past. In what now feels like a lifetime ago, Fairfax was once wildly popular with Bay Street fund managers and traded at an astounding four times its book value (an accounting term equal to a firm’s assets minus its liabilities). But for the past decade investor opinions have soured, with many lamenting its weak insurance underwriting and costly macro economic speculation. Consequently, Fairfax trades for 0.75 times its book value (half of its peer group), indicating investors now believe it will be unable to earn a satisfactory return. Much like a large ship turning at sea, it takes time to change investor opinions, and Fairfax is no exception. Although the company suffered from underwriting losses in 14 of the 20 years leading up to 2011, since then it has turned an underwriting profit in every year except one. Furthermore, the large macro investment calls were stopped back in 2016 with follow-up declarations from management that they will not return to shorting the market or individual stocks. Yet investors refuse to update their prior views to this new simplified reality. Even when an undeniably positive event happens to Fairfax, investors often greet the news with little more than a shrug. A recent example occurred in June when the company unexpectedly announced it had sold its pet insurance division for US$1.4-billion, or approximately six times its book value. This was a massive win for shareholders, yet the stock decreased slightly for the week while the insurance sector advanced. Continuing with the nautical metaphor, the investment horizon has never been brighter for Fairfax. Insurance is one of the few industries that actually benefits from higher interest rates (owing to an insurer’s ability to invest customer premiums prior to claims). Fairfax’s bond portfolio is uniquely positioned for this new higher interest rate reality. When rates were low, Fairfax did not “reach for yield” like many of its peers. Management tolerated the lower yielding cash and short term debt, unwilling to lock shareholders into bonds that would provide a negative real return. With central banks now aggressively hiking rates to fight inflation, Fairfax’s interest and dividend income will double this year to US$1-billion? Even better, the massive decline in long-term bond values is constraining competitors’ capacity to write new policies, allowing Fairfax to aggressively capitalize on this opportunity. In fact, most readers might be surprised to learn that Fairfax’s gross insurance premiums have grown from US$8-billion in 2015 to an expected US$28-billion in 2022. This is an incredible transformation, yet Fairfax shares today trade for less than they did seven years ago. Undoubtedly, risks remain with Fairfax; shareholders will only find out in the future whether today’s insurance underwriting was adequate, management could revert to macro speculation and with the global economy slowing, bond yields could give up some of their recent move higher. However, today’s stock price has already deeply discounted many of these pessimistic scenarios and I believe Fairfax shares merit consideration for investors willing to look beyond past headlines to its underlying business value.

Reinsurance Rates Rising Global geopolitical tensions, high inflation and climate change have heightened demand for risk protection and will lead to increased premiums, top reinsurers said at the industry’s annual gathering in Monte Carlo. Reinsurers insure the insurers and have been pushing up premiums in recent years as they have faced higher losses. “On top of impacts from COVID-19 and increasing losses from natural catastrophes, the reinsurance industry is now confronted with issues like inflation, risk of recession and geopolitical tensions,” said Moses Ojeisekhoba, Swiss Re’s chief executive officer reinsurance, in a statement on Monday. STORY CONTINUES BELOW ADVERTISEMENT “As we see cost drivers accelerating in this dynamic risk environment, insurance premiums must be carefully calibrated to keep pace,” he added. Reinsurers meet their insurance clients in Monte Carlo to hammer out contracts ahead of the key Jan. 1 reinsurance renewal season. Rates could rise in the “mid-single digit” per cent range, S&P analysts said last week, while a Moody’s customer survey showed expectations for double-digit rate rises in U.S. property reinsurance. Rates could rise by 10 per cent or more in some markets, Munich Re and Hannover Re executives also told media briefings on Sunday and Monday, given the strength of inflation. “It’s not an easy time,” Hannover Re CEO Jean-Jacques Henchoz said. “We have a general environment which is very volatile because of the direct and indirect implications of the (Ukraine) war … inflation is the driving topic in many of our discussions here in Monte Carlo.” Hannover Re highlighted the impact of the war in Ukraine, which Russia calls a “special military operation”, on the aviation and marine markets. However, the changing environment also provides some opportunities for insurers and reinsurers. The Swiss Re Institute expects $33-billion to be generated in commercial premium volumes in the period from 2022 to 2026 as companies relocate their supply chains closer to their home countries. Swiss Re also plans to further grow its natural catastrophe portfolio, where the market is forecast to grow to $48-billion from $35-billion in the next four years.

National Bank With P&C Insurance Q2 Preview MIDNIGHTTRADER - Updated just now 01:00 PM EDT, 07/25/2022 (MT Newswires) -- National Bank says the P&C sector remains well positioned for the near term given hard market conditions and rising interest rates that support improved investment income (in particular for Fairfax Financial). National's view is that pricing trends will continue to outpace loss cost trends overall, even for Personal Auto lines, as driving behaviour has yet to complete its path to normalization and auto repair / parts price increases still lag U.S. trends. 1. Trisura Group remains Top Pick with an Outperform rating and $60 target (unchanged). 2. Fairfax Financial remains Best Value idea in its coverage, with an Outperform rating and $1,050 target (unchanged). 3. Intact Financial has an Outperform and $227 target (down from $230). IFC continues to merit a premium valuation as National expects the company will i) successfully integrate and operate RSA's Canada and UK&I operations (delivering on synergy upside); and ii) produce roughly mid-teens OROE through 2023 and beyond. While risk to Personal Auto profitability has risen given inflationary forces seen in the U.S., National believes rate increases will continue to outpace loss cost trends. Persistent hard market conditions also increase the likelihood IFC will deliver earnings outperformance in the near term. IFC delivered total company combined ratio of ~95% in 2018 and 2019 compared to ~89% in 2020 and 2021. National is forecasting ~92% in 2022 and 2023, which may still prove conservative given recent performance in hard market conditions. 4. Definity Financial is a "land grab story with an ROE expansion kicker with an Outperform rating and $38 target (unchanged).

I am eyeing Atco at these levels recognizing it may take a year or so for it to take off.

Can’t stop smiling today. Sold my 8$ BB when it hit $31 and bought in RFP at 11$. Life is good.

True and they got some dividends along the way

At the AGM Prem also said he’d continue buy backs north of $700

Scotiabank on Fairfax Financial's Pet Insurance Sale MIDNIGHTTRADER - Updated 3 hours ago 12:14 PM EDT, 06/20/2022 (MT Newswires) -- Fairfax Financial announced a transaction that Scotiabank believes further highlights the significant gap between its intrinsic value and current stock price. Fairfax is selling the pet insurance operations of its Crum & Forster segment and Pethealth Inc. for $1.4 billion. Over the years, Fairfax has made a number of acquisitions in the pet insurance space totalling an estimated ~$150 million including Pethealth Inc. in 2014. No specific deal metrics were provided, but Scotia estimates the sale represents a likely return on capital of roughly ~5.6x. The accounting for the deal likely has a number of moving parts, but analyst Phil Hardie believes the deal could result in a sizable pre-tax gain potentially as high as $1.1 billion or ~$35.50/sh after-tax and boost Fairfax's book value by an additional 5.5%.

Likely divided between FFH and FIH. Remember Digit is in India.

Sanjeev…I agree with others…it appears both this board and the stock are in a pre agm, pre results holding pattern. Also, I suspect most are feeling quite au courant thanks to Vikings in depth spread sheets, Gliders thoughtful analyses, your well substantiated forecasts and the increased transparency coming from FFH. Just waiting for the party to begin

Sanjeev, do you know of any Toronto events, talks, discussions in and around the AGM?

Fairfax India Holdings Corporation (TSX: FIH.U) announces fiscal year 2021 net earnings of $494.5 million ($3.22 net earnings per diluted share), compared to fiscal year 2020 net loss of $41.5 million ($0.27 net loss per diluted share), reflecting increased net unrealized and realized gains on investments, partially offset by increased performance fees and provision for income taxes. The company's book value per share increased by 20.0% from $16.37 at December 31, 2020 to $19.65 at December 31, 2021, representing a compound annual growth rate of 10.3% (10.7% prior to the performance fee recorded in 2021) from the initial public offering price or $10.00 per share.

Depends whether your goal is to win, place or show!

I’m not sure we have enough inside context to judge it to have been a mistake.

After having to raise cash for the auction it’s unlikely to have that much is reserve

Somebody is loading up the truck. Last two days have begun with 100m share transactions.

Some things to factor in to your calculations re eventual cost of odyssey re transaction 1) FFH will have realized a capital gain of about $450M on the sale of its 10% 2) FFH’s dividend obligation in January will be reduced by $20M

Based on preliminary results, 2,208,578 Shares were validly tendered and were not withdrawn pursuant to the Offer (including Shares tendered by notice of guaranteed delivery). As the Offer was oversubscribed, it is expected that shareholders who made auction tenders at or below US$500.00 per Share and purchase price tenders will have the number of Shares purchased by Fairfax prorated to approximately 90.4% of their successfully tendered Shares following the determination of the final results of the Offer (other than “odd lot” tenders, which are not subject to proration). The full details of the Offer are described in the offer to purchase and issuer bid circular dated November 18, 2021, as well as the related letter of transmittal and notice of guaranteed delivery, copies of which were filed and are available on SEDAR at www.sedar.com and were also filed on a Schedule 13E-4F with the U.S. Securities and Exchange Commission and made available on EDGAR at www.sec.gov (the “Offer Documents”). The number of Shares to be purchased under the Offer, the Purchase Price and the proration factor referred to above are preliminary, remain subject to verification by the Depositary and assume that all Shares tendered through notice of guaranteed delivery will be delivered within the two trading day settlement period. Fairfax will announce the final results of the Offer following completion of take-up of the Shares.

Great to see an official challenge to “wokenomics”

Also note that total corporate transparency is an impossible expectation. There can be any number of reasons for non-disclosure ranging from regulatory to confidentiality commitments to other market impacts.