Fairfax to acquire a bank in India

[indirect]

http://www.livemint.com/Companies/lJU16MfCSb9VQG2EhphBMK/Prem-Watsas-Fairfax-gets-initial-approval-to-buy-Catholic-S.html

[nwoodman]

Thanks for posting.  Certainly a couple of points cheaper than a few weeks ago.  Politically a very high chance it will close. A very interesting litmus test for what the middle game in India could achieve

 

cheers

nwoodman

[nwoodman]

"The deal, under which Fairfax will pick up a majority stake in the capital-starved lender for Rs 1,000 crore (USD 147m), is unique because it gives the Canadian company just 15% voting rights in the bank in line with the Reserve Bank of India (RBI) regulations. In other words, it opens up a new door for investors wanting a piece of the lucrative Indian banking sector within existing regulations. "

 

 

http://economictimes.indiatimes.com/industry/banking/finance/banking/how-prem-watsas-deal-to-buy-stake-in-csb-offers-ray-of-hope-for-ailing-banks/articleshow/55843011.cms

 

 

 

Any thoughts to how this works?  My guess is two share classes, with the second having negligible voting rights but equal rights economically when it comes to distributions (eg Brk.A and Brk.B).  Interesting that if it closes,  Fairfax will be the first company allowed to invest in such a way

 

cheers

 

nwoodman

[berkshiremystery]

Fairfax Financial first to win approval to buy majority stake in Indian bank.

Cheers!

 

-----

 

http://www.theglobeandmail.com/report-on-business/fairfax-gains-approval-to-buy-51-stake-in-indian-lender/article33453235/

 

http://business.financialpost.com/news/fp-street/fairfax-financial-first-to-win-approval-to-buy-majority-stake-in-indian-bank

 

http://www.financialexpress.com/industry/banking-finance/rbi-lets-watsas-fairfax-to-buy-51-in-catholic-syrian-bank/491664/

 

http://www.nasdaq.com/article/fairfax-financial-holdings-to-acquire-51-stake-in-catholic-syrian-bank-20161230-00059

[chrispy]

Just came across this video.  There is nothing ground breaking here, similar content to other Watsa interviews talking about India:

 

[berkshiremystery]

Billionaire Prem Watsa Feeds OMERS’ Thirst for Indian Exposure

JANUARY 15, 2017

 

Post-transaction, OMERS owns 20,363,514 shares of Fairfax India Holdings, representing 17.34% of the share class of Fairfax India Holdings.

 

http://www.swfinstitute.org/swf-article/billionaire-prem-watsa-feeds-omers-thirst-for-indian-exposure-35315241/

[TwoCitiesCapital]

Billionaire Prem Watsa Feeds OMERS’ Thirst for Indian Exposure

JANUARY 15, 2017

 

Post-transaction, OMERS owns 20,363,514 shares of Fairfax India Holdings, representing 17.34% of the share class of Fairfax India Holdings.

 

http://www.swfinstitute.org/swf-article/billionaire-prem-watsa-feeds-omers-thirst-for-indian-exposure-35315241/

 

Anyone have a guess at who was selling? Just trying to understand the significance of the money moving around here since new shares can't be issued.

[gfp]

Private placement sounded like new shares to me - is it written somewhere that new shares can't be issued?

 

Billionaire Prem Watsa Feeds OMERS’ Thirst for Indian Exposure

JANUARY 15, 2017

 

Post-transaction, OMERS owns 20,363,514 shares of Fairfax India Holdings, representing 17.34% of the share class of Fairfax India Holdings.

 

http://www.swfinstitute.org/swf-article/billionaire-prem-watsa-feeds-omers-thirst-for-indian-exposure-35315241/

 

Anyone have a guess at who was selling? Just trying to understand the significance of the money moving around here since new shares can't be issued.

[TwoCitiesCapital]

Private placement sounded like new shares to me - is it written somewhere that new shares can't be issued?

 

Billionaire Prem Watsa Feeds OMERS’ Thirst for Indian Exposure

JANUARY 15, 2017

 

Post-transaction, OMERS owns 20,363,514 shares of Fairfax India Holdings, representing 17.34% of the share class of Fairfax India Holdings.

 

http://www.swfinstitute.org/swf-article/billionaire-prem-watsa-feeds-omers-thirst-for-indian-exposure-35315241/

 

Anyone have a guess at who was selling? Just trying to understand the significance of the money moving around here since new shares can't be issued.

 

It's a closed-ended fund. That's exactly what a closed ended fund means - that it issues shares once and not again, right? Or can closed-ended funds regularly issue new shares?

[benhacker]

It's a closed-ended fund. That's exactly what a closed ended fund means - that it issues shares once and not again, right? Or can closed-ended funds regularly issue new shares?

 

They can just do a secondary to issue new shares... so it's like a company doing a secondary.

 

interesting fact that ETFs are actually "closed ends" with just a very explicit and fast exchange / redeem feature...

[TwoCitiesCapital]

It's a closed-ended fund. That's exactly what a closed ended fund means - that it issues shares once and not again, right? Or can closed-ended funds regularly issue new shares?

 

They can just do a secondary to issue new shares... so it's like a company doing a secondary.

 

interesting fact that ETFs are actually "closed ends" with just a very explicit and fast exchange / redeem feature...

 

Interesting. I wasn't aware that CEFs had the ability to issue new shares after the IPO. For some reason, thought that shares outstanding had to remain fixed unless if repurchased and canceled.

 

Thanks for the info.

[valuesource]

I think the terminology in this dialogue is a bit confusing.  I agree, they can issue new shares (which they did via the private placement) but the term "secondary offering" usually refers to a scenario where an existing holder offers a block of shares through a bank or financial intermediary.  So in the secondary market/not from treasury.  Secondary offerings can be "bought" or "marketed, similar to new issues.

[benhacker]

Valuesource. You are of course correct. Meant to say follow on offering...