Fairfax stock positions

[Parsad]

Like Berkshire, don't get confused by positions executed by Buffett and those executed by Todd and Ted.  

 

At Fairfax, the investment committee makes the really big investments, but junior managers, analysts are given a smaller portfolio to manage.  The S&P500 position might be one of those portfolios...not a key position by the investment committee.

 

Cheers!

[Viking]

Here are the swings I see in Q2 (from the 13F). 

 

Exited Bank of America. Not surprising given what we learned over the past 4 months (lots of negative headwinds for this sector). Buffett was also aggressively selling his bank holdings. Proceeds from BAC and CVX sales were rolled into Occidental, where position size was doubled, when oil shares in general were weak. Net/net, Occidental is now close to a $400 million position for Fairfax. This puts it around 2.5% of Fairfax's equity portfolio or #10 holding by size. Still pretty small in the big scheme of things. 

 

But if you add EXCO and Ensign, energy is close to $1 billion = 6.1% of the total equity portfolio. That looks like a decent weighting towards energy.

 

The Vanguard Index 500 - VOO - is a tiny position. It will be interesting to see if this purchase is one and done or if they grow the position size meaningfully.  

 

 

Edited August 15, 2023 by Viking

[ValueMaven]

MU was up BIG yesterday ... 

[glider3834]

https://www.zawya.com/en/press-release/companies-news/gulf-insurance-group-announces-net-profit-of-kd-253mln-825mln-for-the-first-half-of-2023-n33dfufu

 

GIG paid a div of close to US$50M in 1H23, which I think is one reason why increase in shareholders equity didn''t increase in line with US$82M profit in 1H23

 

 

 

 

 

 

[Saluki]

I haven't seen this posted about even though it was a couple of months ago: 

 

Concerned Shareholder Urges BlackBerry Board to Guard Against Unfair Buyout Bids and Oppose Watsa as Director as Board Considers Strategic Alternatives

https://finance.yahoo.com/news/concerned-shareholder-urges-blackberry-board-140300075.html

 

As a Fairfax shareholder, I hope it works out because that money has been parked in BB for a long time in something that was fairly speculative.  I don't blame the guy for thinking he's going to get low balled in a take under.  It literally happened to a lot us with ATCO last year.  

[Viking]

Thomas Cook (India) Limited (TC) recently reported quarterly results (to June 30, 2023) that were very good. It appears people in India are travelling again. Since June 30:

• the share price of TC is up about 47% from 76 rupees to 112 rupees.
• Fairfax’s position in TC is up $146 million to $458 million. This makes TC a top 10 equity holding for Fairfax with a weighting of 2.7% of its $16.8 billion equity portfolio.

Fairfax owns 72.34% of TC. In 2021, TC need cash to help it get through Covid and Fairfax stepped up with a $60 million preferred share investment. This investment has returned more than 100% to Fairfax shareholders in about 2 years. It was an opportunistic deal for Fairfax. But also much needed at the time by TC. 

 

From Fairfax’s 2022AR: “During 2021, Thomas Cook India raised $60 million from Fairfax through optionally convertible redeemable preference shares with a 10.7% dividend yield, a seven-year tenure and an option to convert into ordinary shares of the company at 47.30 rupees per share within 18 months from the date of issuance. Thomas Cook India chose to convert the entire amount over two tranches resulting in Fairfax’s ownership increasing to 73.3%.”

 

Covid caused TC to aggressively cut costs. With its businesses now rebounding in 2023, that lower cost base is spiking profits at TC which we saw when they reported a couple of weeks ago.

 

From Fairfax’s 2022AR: “Thomas Cook India implemented extensive cost saving initiatives combined with enhanced automation to mitigate the drop in business and improve profitability as normalcy returns. We are pleased to note that total costs were down 40% compared to pre-pandemic levels, while a permanent saving of 20% in overheads compared to the pre-pandemic levels is envisaged.”

 

Covid also caused Sterling Resorts, owned by TC, to lower costs and re-imagine its business model. The results at this subsidiary at TC have been extraordinary and are another reason profit is spiking at TC in 2023.

 

From Fairfax’s 2021AR: “You will recall from my letter in 2014 that Thomas Cook acquired Sterling Resorts in 2014, mainly because of Ramesh Ramanathan, the CEO of the company. As you can imagine, Sterling faced difficult times in the last two years during the COVID-19-inspired lockdowns. Ramesh did a remarkable job in managing cash flow, allowing the company to stay self-sufficient throughout this period. Also, Ramesh used this time to reorient Sterling’s business model and transform it into a holiday experience company.”

 

From Fairfax’s 2022AR: “Sterling Resorts, a subsidiary of Thomas Cook India, reported its best ever results, thriving as it remained a premier leisure hospitality brand in India with 39 resorts, 37 destinations and more than 2,300 rooms besides offering vacation time share. You will recall that my letter last year reported on the leadership transition at Sterling, and we are happy to report the smooth transition from Ramesh Ramanathan to Vikram Lalvani, with excellent results achieved at Sterling during the year. Under Vikram’s leadership, Sterling emerged out of two years of pandemic with a revival in the resort business in 2022 surpassing the performance of the pre-pandemic period, despite some impact due to the third wave of COVID in Q1, reporting 18% growth in revenue over the year 2019 and 21% over 2021. Its EBITDA of $15 million in 2022 is over fifteen times the $1 million it reported in 2019, and it grew 66% over 2021 on a normalised basis. The operating free cash flow doubled during the period. It ended 2022 with surplus cash and investments of $11 million besides achieving debt reduction of $4 million during the year. Sterling is focused on scaling the resort business by increasing non-member occupancies, boosting revenue from room rates and increasing food and beverage sales. Non-profitable resorts are being dropped from the portfolio, alongside a decreased focus on volume in favour of quality. With the Sterling experience getting appreciation from non-members, the focus is going to be on the quality of growth and enhancing the brand experience at the same time.”

 

Fairfax demonstrates it is a very good partner

 

TC is good example of a Fairfax equity holding that was negatively impacted by Covid (BIAL and Recipe are two other Fairfax holdings that were also severely affected by Covid). Fairfax supported the company when times were tough. TC got to work and has emerged today stronger (and more profitable) than ever. Fairfax shareholders are now reaping the reward.

 

An earnings turnaround at equity holdings negatively impacted by Covid is another reason why reported earnings at Fairfax continues to ‘surprise’ to the upside. A headwind to reported earnings for Fairfax in 2020 and 2021 has now become a tailwind in 2023. 

 

Fairfax 2022AR: “We are happy to note a substantial recovery in Thomas Cook India’s businesses during 2022. With excellent leadership by Madhavan Menon, Thomas Cook India exited the year reporting a 90% recovery in its forex business, 79% recovery in its outbound travel business and 84% recovery in its inbound travel business. This is following a difficult year in 2020 when COVID-19 caused its travel business to decline by 90% and its forex business to decline by 75%, and an incipient recovery of 53% in forex business and 27% in travel business in 2021. Business recovery combined with cost reductions resulted in its results improving – a pre-tax loss of $2 million in 2022 compared to a pre-tax loss of $46 million in 2021.”

 

What is Fairfax’s holding in Thomas Cook India valued at?

 

At Dec 31, 2022, TC had a carrying value at Fairfax of $214 million. With a market value today of $458 million, the excess of market value over carrying value is about $244 million. This $244 million is not captured in the book value of Fairfax.

 

 

 

Who is Thomas Cook (India) Limited?

 

TC is the leading omnichannel travel company in India offering a broad spectrum of services including Foreign Exchange, Corporate Travel, MICE, Leisure Travel, Value Added Services and Visa Services.

 

Company presentation: https://resources.thomascook.in/downloads/SEINTIMATION_TCIL_V2.pdf

 

Below is a brief history of Fairfax’s investment in Thomas Cook India:

 

TC was Fairfax’s first large purchase in India. In 2012, Fairfax purchased 87.1% for $173 million. TC subsequently made three large acquisitions to round out its portfolio of assets:

• Feb 2014: Sterling Resorts for $140 million plus shares (Fairfax invested $81 million to help with this acquisition).
• Aug 2015: Kuoni India and Kuoni Hong Kong for $64 million
• March 2019: Digiphoto Entertainment Imaging (51% interest) for $21 million.

Fairfax 2020AR: “As you will recall, our first major acquisition in India was the purchase of a 77% interest (later reduced to 67%) in Thomas Cook India, led by Madhavan Menon. Thomas Cook, first set up in India in 1881, is the leading integrated travel and travel-related financial services company in India, offering, through its 4,700 employees, a broad spectrum of services that include foreign exchange, corporate travel, leisure travel, insurance, visa and passport services and e-business. With the 2015 purchase of Kuoni’s Indian travel business and then its operations all over the world, Thomas Cook India is today one of the largest high-end travel service provider networks headquartered in the Asia-Pacific region. With the 2019 purchase of Digiphoto Entertainment Imaging (‘‘DEI’’), Thomas Cook has emerged as a complete travel solutions company. DEI provides imaging solutions for the entertainment industry, giving Thomas Cook India an opportunity to package DEI products with Thomas Cook Tours. Established in 2004, DEI has offices throughout the Far East, as well as in the Middle East, India and the U.S., and has a network of 130 entertainment partners.”

 

The IKYA/Quess Home Run:

In 2012, Fairfax designated TC as the vehicle through which it was going to be investing in India. In May of 2013, TC purchased a 77.3% interest in IKYA (renamed Quess) for $47 million. In 2017, TC sold 5.4% of Quess for $97 million. In December 2019, TC spun out all of Quess. Fairfax current owns of 35% of Quess, with a value of around $225 million. IKYA/Quess has been a very good investment in India for Fairfax.

 

Strategic Shift

Modi’s election in 2014 caused Fairfax to shift its strategy in India. Fairfax wanted to accelerate its investments and TC’s structure was too limiting. In 2015, Fairfax India was born and it was decided this platform would house all of Fairfax’s future non-insurance investments in India. However, legacy investments like TC and Quess would continue to be owned directly by Fairfax. Fairfax also directly owns Digit - its insurance vehicle in India.

 

Edited August 18, 2023 by Viking

[petec]

On 8/14/2023 at 9:41 PM, dartmonkey said:

 That would indeed be worrisome, given Watsa's pretty unambiguous promise in the 2018 report:

 

In the past, to protect our equity exposures in uncertain times, we shorted indices (mainly the S&P500 and Russell 2000) and a few common stocks. After much thought and discussion, it became clear to me that shorting is dangerous, very short term in nature and anathema to long term value investing. As I mentioned to you in last year’s annual report, shorting has cost us, cumulatively, net of our gains on common stock, approximately $2 billion! This will not be repeated! In the future, we may use options with a potential finite loss to hedge our equity exposure, but we will never again indulge anew in shorting with uncapped exposure. Your Chairman continues to learn–slowly!!

 

repeated in 2021: 

 

I said in our 2019 [sic; but I think he meant 2018] annual report that we would not short stock market indices (like the S&P500) or common stocks of individual companies ever again, and our last remaining short position was closed out in 2020 (not soon enough, as it cost us $529 million in 2020).

 

If he renegs on this promise, I think people would be furious. Even though I think shorting the market would probably work out well at current prices, with the company doing so well since the end of the shorts, I dare to hope that he has ruled out shorting too clearly for him to just go back to doing it again.

 

 

I'd be furious if they "indulge anew in shorting with uncapped exposure", but I think it is important to note that they "may use options with a potential finite loss to hedge our equity exposure". 

 

I have always felt they made two mistakes with the shorts:

1) the reasoning was wrong. I defended it at the time and was also wrong. Hedging an unexpensive market because you expect a depression is flat out dumb, especially in a fiat regime when the printer is going "whirr".

2) they did it the wrong way, with uncapped downside.

 

Retaining the ability to buy out of the money puts with finite downside is smart and I am glad they have. I'd be happy if they did this with individual stocks occasionally too, but that's less important than being able to hedge the entire portfolio sometimes.

  

[petec]

3 hours ago, Viking said:

Thomas Cook (India) Limited (TC) recently reported quarterly results (to June 30, 2023) that were very good. It appears people in India are travelling again. Since June 30:

• the share price of TC is up about 35% from 76 rupees to 104 rupees.
• Fairfax’s position in TC is up $110 million to $425 million. This makes TC a top 10 equity holding for Fairfax with a weighting of 2.5% of its $16.8 billion equity portfolio.

Fairfax owns 72.34% of TC. In 2021, TC need cash to help it get through Covid and Fairfax stepped up with a $60 million preferred share investment. This investment has returned more than 100% to Fairfax shareholders in about 2 years. It was an opportunistic deal for Fairfax. But also much needed at the time by TC. 

 

From Fairfax’s 2022AR: “During 2021, Thomas Cook India raised $60 million from Fairfax through optionally convertible redeemable preference shares with a 10.7% dividend yield, a seven-year tenure and an option to convert into ordinary shares of the company at 47.30 rupees per share within 18 months from the date of issuance. Thomas Cook India chose to convert the entire amount over two tranches resulting in Fairfax’s ownership increasing to 73.3%.”

 

Covid caused TC to aggressively cut costs. With its businesses now rebounding in 2023, that lower cost base is spiking profits at TC which we saw when they reported a couple of weeks ago.

 

From Fairfax’s 2022AR: “Thomas Cook India implemented extensive cost saving initiatives combined with enhanced automation to mitigate the drop in business and improve profitability as normalcy returns. We are pleased to note that total costs were down 40% compared to pre-pandemic levels, while a permanent saving of 20% in overheads compared to the pre-pandemic levels is envisaged.”

 

Covid also caused Sterling Resorts, owned by TC, to lower costs and re-imagine its business model. The results at this subsidiary at TC have been extraordinary and are another reason profit is spiking at TC in 2023.

 

From Fairfax’s 2021AR: “You will recall from my letter in 2014 that Thomas Cook acquired Sterling Resorts in 2014, mainly because of Ramesh Ramanathan, the CEO of the company. As you can imagine, Sterling faced difficult times in the last two years during the COVID-19-inspired lockdowns. Ramesh did a remarkable job in managing cash flow, allowing the company to stay self-sufficient throughout this period. Also, Ramesh used this time to reorient Sterling’s business model and transform it into a holiday experience company.”

 

From Fairfax’s 2022AR: “Sterling Resorts, a subsidiary of Thomas Cook India, reported its best ever results, thriving as it remained a premier leisure hospitality brand in India with 39 resorts, 37 destinations and more than 2,300 rooms besides offering vacation time share. You will recall that my letter last year reported on the leadership transition at Sterling, and we are happy to report the smooth transition from Ramesh Ramanathan to Vikram Lalvani, with excellent results achieved at Sterling during the year. Under Vikram’s leadership, Sterling emerged out of two years of pandemic with a revival in the resort business in 2022 surpassing the performance of the pre-pandemic period, despite some impact due to the third wave of COVID in Q1, reporting 18% growth in revenue over the year 2019 and 21% over 2021. Its EBITDA of $15 million in 2022 is over fifteen times the $1 million it reported in 2019, and it grew 66% over 2021 on a normalised basis. The operating free cash flow doubled during the period. It ended 2022 with surplus cash and investments of $11 million besides achieving debt reduction of $4 million during the year. Sterling is focused on scaling the resort business by increasing non-member occupancies, boosting revenue from room rates and increasing food and beverage sales. Non-profitable resorts are being dropped from the portfolio, alongside a decreased focus on volume in favour of quality. With the Sterling experience getting appreciation from non-members, the focus is going to be on the quality of growth and enhancing the brand experience at the same time.”

 

Fairfax demonstrates it is a very good partner

 

TC is good example of a Fairfax equity holding that was negatively impacted by Covid (BIAL and Recipe are two other Fairfax holdings that were also severely affected by Covid). Fairfax supported the company when times were tough. TC got to work and has emerged today stronger (and more profitable) than ever. Fairfax shareholders are now reaping the reward.

 

An earnings turnaround at equity holdings negatively impacted by Covid is another reason why reported earnings at Fairfax continues to ‘surprise’ to the upside. A headwind to reported earnings for Fairfax in 2020 and 2021 has now become a tailwind in 2023. 

 

Fairfax 2022AR: “We are happy to note a substantial recovery in Thomas Cook India’s businesses during 2022. With excellent leadership by Madhavan Menon, Thomas Cook India exited the year reporting a 90% recovery in its forex business, 79% recovery in its outbound travel business and 84% recovery in its inbound travel business. This is following a difficult year in 2020 when COVID-19 caused its travel business to decline by 90% and its forex business to decline by 75%, and an incipient recovery of 53% in forex business and 27% in travel business in 2021. Business recovery combined with cost reductions resulted in its results improving – a pre-tax loss of $2 million in 2022 compared to a pre-tax loss of $46 million in 2021.”

 

What is Fairfax’s holding in Thomas Cook India valued at?

 

At Dec 31, 2022, TC had a carrying value at Fairfax of $214 million. With a market value today of $425 million, the excess of market value over carrying value is about $210 million. This $210 million is not captured in the book value of Fairfax.

 

 

Who is Thomas Cook (India) Limited?

 

TC is the leading omnichannel travel company in India offering a broad spectrum of services including Foreign Exchange, Corporate Travel, MICE, Leisure Travel, Value Added Services and Visa Services.

 

Company presentation: https://resources.thomascook.in/downloads/SEINTIMATION_TCIL_V2.pdf

 

Below is a brief history of Fairfax’s investment in Thomas Cook India:

 

TC was Fairfax’s first large purchase in India. In 2012, Fairfax purchased 87.1% for $173 million. TC subsequently made three large acquisitions to round out its portfolio of assets:

• Feb 2014: Sterling Resorts for $140 million plus shares (Fairfax invested $81 million to help with this acquisition).
• Aug 2015: Kuoni India and Kuoni Hong Kong for $64 million
• March 2019: Digiphoto Entertainment Imaging (51% interest) for $21 million.

Fairfax 2020AR: “As you will recall, our first major acquisition in India was the purchase of a 77% interest (later reduced to 67%) in Thomas Cook India, led by Madhavan Menon. Thomas Cook, first set up in India in 1881, is the leading integrated travel and travel-related financial services company in India, offering, through its 4,700 employees, a broad spectrum of services that include foreign exchange, corporate travel, leisure travel, insurance, visa and passport services and e-business. With the 2015 purchase of Kuoni’s Indian travel business and then its operations all over the world, Thomas Cook India is today one of the largest high-end travel service provider networks headquartered in the Asia-Pacific region. With the 2019 purchase of Digiphoto Entertainment Imaging (‘‘DEI’’), Thomas Cook has emerged as a complete travel solutions company. DEI provides imaging solutions for the entertainment industry, giving Thomas Cook India an opportunity to package DEI products with Thomas Cook Tours. Established in 2004, DEI has offices throughout the Far East, as well as in the Middle East, India and the U.S., and has a network of 130 entertainment partners.”

 

The IKYA/Quess Home Run:

In 2012, Fairfax designated TC as the vehicle through which it was going to be investing in India. In May of 2013, TC purchased a 77.3% interest in IKYA (renamed Quess) for $47 million. In 2017, TC sold 5.4% of Quess for $97 million. In December 2019, TC spun out all of Quess. Fairfax current owns of 35% of Quess, with a value of around $225 million. IKYA/Quess has been a very good investment in India for Fairfax.

 

Strategic Shift

Modi’s election in 2014 caused Fairfax to shift its strategy in India. Fairfax wanted to accelerate its investments and TC’s structure was too limiting. In 2015, Fairfax India was born and it was decided this platform would house all of Fairfax’s future non-insurance investments in India. However, legacy investments like TC and Quess would continue to be owned directly by Fairfax. Fairfax also directly owns Digit - its insurance vehicle in India.

 

 

I've idly tracked TCIL ever since FFH bought it, including talking to the HWIC Asia team about it some years ago. It always seemed a highly intuitive investment to me - good going in price, great way to benefit from rising per capita GDP in India, sensible-sounding tuck in deals - and yet it never really seemed to work. I thought it was going to grow fast and gush cash, but I don't think it has (even allowing for covid).

 

Similar to Quantum Advisors, if anyone remembers that - it was meant to become the Vanguard of India but is never mentioned now.

 

Can't win them all!

[SafetyinNumbers]

James East pointing out over on Twitter that FFH seems to have sold a big portion of its direct stake in IIFL Securities while FIH.U continues to hold. I think FIH.U likely announces an SIB by year end as they have the cash, have taken a break on the NCIB for two months already and need to pay the performance fee at year end. In 2021, they announced it on June 15. If it ends up being a reasonable analog then maybe Sept 15 is when we should expect an announcement. 

https://x.com/acipartnerhship/status/1692192406903365930?s=61&t=o1MAr_q6CYLyhGegyE3GdA

 

https://t.co/wnlzyCWQcn

 

https://www.fairfaxindia.ca/press-releases/fairfax-india-announces-us105-million-substantial-issuer-bid-2021-06-15/

[Viking]

4 hours ago, SafetyinNumbers said:

James East pointing out over on Twitter that FFH seems to have sold a big portion of its direct stake in IIFL Securities while FIH.U continues to hold. I think FIH.U likely announces an SIB by year end as they have the cash, have taken a break on the NCIB for two months already and need to pay the performance fee at year end. In 2021, they announced it on June 15. If it ends up being a reasonable analog then maybe Sept 15 is when we should expect an announcement. 

https://x.com/acipartnerhship/status/1692192406903365930?s=61&t=o1MAr_q6CYLyhGegyE3GdA

 

https://t.co/wnlzyCWQcn

 

https://www.fairfaxindia.ca/press-releases/fairfax-india-announces-us105-million-substantial-issuer-bid-2021-06-15/

 

In Dec 2021, Fairfax sold down their position in IIFL Finance and Wealth. Selling down IIFL Securities now follows this trend. Regulators in India do not appear to like 'cross' holdings... i.e. owning the same security in both Fairfax India and Fairfax. I wonder if one of the drivers of these collection of moves is to reduce their cross holdings of Indian securities (their IIFL holdings). 

 

This also 'cleans up' Fairfax's holdings of Indian stocks. They still directly own legacy holdings Thomas Cook, Quess and Quantum Advisors (an investment manager purchased in late 2015 for $46 million). But the rest of the Indian portfolio of stocks is now primarily owned through Fairfax India. Pretty clean and easy to understand.

 

Of course, Digit is also owned at the Fairfax level - because it is an insurance company.    

Edited August 18, 2023 by Viking

[glider3834]

unclear what the size of this acquisition is for Fairfax - article paywall protected

https://www.unquote.com/uk/official-record/3029870/exponent-divests-significant-stake-in-meadow-to-canadian-investor

 

meadow foods - recent results 

https://www.thegrocer.co.uk/dairy/meadow-foods-reports-strong-growth-with-sales-and-profits-up/674367.article

 

https://meadowfoods.co.uk/about/

MEADOW HAS GROWN OVER 30 YEARS INTO A £550M VALUE-ADDED INGREDIENTS BUSINESS SPECIALISING IN THE DAIRY, CONFECTIONERY, ICE CREAM, PREPARED FOODS AND PLANT-BASED INDUSTRIES.

Edited August 22, 2023 by glider3834

[netcash1]

LONDON, 22 August 2023 - Exponent today announces that it has reached an agreement to sell a portion of its stake in Meadow, a leader in sustainable dairy, confectionery and plant-based ingredients, to Fairfax Financial Holdings Limited (‘Fairfax Financial’), a holding company headquartered in Canada.

Meadow partners with the world’s leading food manufacturers to solve their most complex challenges and supplies the crucial ingredients in many of the UK’s favourite brands. The company employs over 500 people across five sites in the UK (Chester, Peterborough, Holme-on-Spalding Moor, Dolgellau and Headcorn).

Building on its strong track record in identifying category-leading businesses under family ownership, Exponent acquired a significant stake in Meadow alongside the Chantler family in 2018. The family and Exponent will retain a stake in the business following the sale.

Under Exponent’s ownership, Meadow has expanded its production footprint and product set via sustained organic growth and strategic acquisitions. Key milestones in recent years include entering the plant-based category through the construction of a segregated plant based dairy facility in Chester and entering the inclusions and sweet sauces categories through the acquisitions of Nimbus Foods and Naked Foods.

Sustainability has been at the heart of Exponent’s strategy in working with Meadow. The business has become a market leader for sustainability in the dairy industry, partnering with farmers to reduce the carbon footprint of its raw materials inputs, targeting net zero operational sites by 2030 and to be fully net zero by 2050. With Exponent’s support, Meadow has re-set the work it does with farmers to reduce carbon emissions and help them prioritise biodiversity. The efforts have resulted in a 21% reduction in CO2e emissions per kilo of milk since 2018. Meadow’s suppliers are now producing milk which is 63% less carbon-intensive than the global average and 15% less carbon-intensive than the UK average.

Mark Taylor, Partner at Exponent, said: “When we invested in Meadow, we recognised the opportunity to support the business in its transformation from a commodity dairy player to a diversified speciality food ingredients supplier, building on our experience in the sector with the likes of Quorn Foods and Loch Lomond. Over the course of our partnership, the business has generated significant organic and inorganic growth, including four bolt-on acquisitions, and accelerated its shift into more value-added ingredients. It is a trusted partner to the world’s largest food and beverage companies. We are delighted to have played a key role in Meadow’s successful journey to date, and we wish the team well as the business prepares for its next phase of growth.”

Raj Tugnait, CEO at Meadow, said: “We are proud of the strong growth achieved since partnering with Exponent, and I’m delighted that Meadow has seen interest from a solid financial institution like Fairfax. The alignment of Fairfax’s culture and values and our shared vision for growth and innovation resonated with me personally. It is business as usual for our customers and Fairfax is the ideal long-term partner for Meadow’s journey ahead.”

 

On 3/2/2023 at 1:57 PM, Parsad said:

 

No.  WRB is missing that third leg of the stool...wholly-owned, non-insurance subsidiaries/businesses.  But it is a great insurer and they do manage their portfolio well. 

 

WTM sort of fits in the same category...they have held outside businesses and investments...back in the day, Leucadia would have fit...Loews Corporation definitely fits with CNA and their non-insurance businesses.  Wintaai/Stonetrust will fit that model...Francis Chou's vehicle.  Biglari Holdings fits the model.

 

Cheers!

 

[glider3834]

Eurobank making a move on Hellenic

 

https://cyprus-mail.com/2023/08/23/eurobank-to-increase-share-in-hellenic-bank-to-46-5-per-cent/

 

https://knews.kathimerini.com.cy/en/business/eurobank-secures-full-control-of-hellenic-with-pimco-share-acquisition

Edited August 23, 2023 by glider3834

[glider3834]

3 minutes ago, glider3834 said:

Eurobank making a move on Hellenic

 

https://cyprus-mail.com/2023/08/23/eurobank-to-increase-share-in-hellenic-bank-to-46-5-per-cent/

Eurobank, currently holds 29.2% in Hellenic Bank, therefore after the completion of the Transaction, its total holding in Hellenic Bank will amount to 46.5%. Consequently, in accordance with the provisions of the Takeover Bids Law of 2007 in Cyprus, Eurobank will proceed, following the completion of the Transaction, to a mandatory tender offer for all the outstanding securities of Hellenic Bank not already held by it at the time.

[glider3834]

14 hours ago, netcash1 said:

LONDON, 22 August 2023 - Exponent today announces that it has reached an agreement to sell a portion of its stake in Meadow, a leader in sustainable dairy, confectionery and plant-based ingredients, to Fairfax Financial Holdings Limited (‘Fairfax Financial’), a holding company headquartered in Canada.

Meadow partners with the world’s leading food manufacturers to solve their most complex challenges and supplies the crucial ingredients in many of the UK’s favourite brands. The company employs over 500 people across five sites in the UK (Chester, Peterborough, Holme-on-Spalding Moor, Dolgellau and Headcorn).

Building on its strong track record in identifying category-leading businesses under family ownership, Exponent acquired a significant stake in Meadow alongside the Chantler family in 2018. The family and Exponent will retain a stake in the business following the sale.

Under Exponent’s ownership, Meadow has expanded its production footprint and product set via sustained organic growth and strategic acquisitions. Key milestones in recent years include entering the plant-based category through the construction of a segregated plant based dairy facility in Chester and entering the inclusions and sweet sauces categories through the acquisitions of Nimbus Foods and Naked Foods.

Sustainability has been at the heart of Exponent’s strategy in working with Meadow. The business has become a market leader for sustainability in the dairy industry, partnering with farmers to reduce the carbon footprint of its raw materials inputs, targeting net zero operational sites by 2030 and to be fully net zero by 2050. With Exponent’s support, Meadow has re-set the work it does with farmers to reduce carbon emissions and help them prioritise biodiversity. The efforts have resulted in a 21% reduction in CO2e emissions per kilo of milk since 2018. Meadow’s suppliers are now producing milk which is 63% less carbon-intensive than the global average and 15% less carbon-intensive than the UK average.

Mark Taylor, Partner at Exponent, said: “When we invested in Meadow, we recognised the opportunity to support the business in its transformation from a commodity dairy player to a diversified speciality food ingredients supplier, building on our experience in the sector with the likes of Quorn Foods and Loch Lomond. Over the course of our partnership, the business has generated significant organic and inorganic growth, including four bolt-on acquisitions, and accelerated its shift into more value-added ingredients. It is a trusted partner to the world’s largest food and beverage companies. We are delighted to have played a key role in Meadow’s successful journey to date, and we wish the team well as the business prepares for its next phase of growth.”

Raj Tugnait, CEO at Meadow, said: “We are proud of the strong growth achieved since partnering with Exponent, and I’m delighted that Meadow has seen interest from a solid financial institution like Fairfax. The alignment of Fairfax’s culture and values and our shared vision for growth and innovation resonated with me personally. It is business as usual for our customers and Fairfax is the ideal long-term partner for Meadow’s journey ahead.”

 

 

thanks for posting

[gfp]

Atlas / Poseidon still reports to the SEC for those that are curious -

https://www.sec.gov/Archives/edgar/data/1794846/000162828023030275/atlascorpq220236-k.htm

[nwoodman]

6 hours ago, gfp said:

Atlas / Poseidon still reports to the SEC for those that are curious -

https://www.sec.gov/Archives/edgar/data/1794846/000162828023030275/atlascorpq220236-k.htm

Brilliant,  many thanks

[Haryana]

On 8/23/2023 at 6:36 AM, glider3834 said:

thanks for posting

 

just another article on the same

 

https://www.foodbev.com/news/fairfax-financial-to-acquire-significant-stake-in-meadow-foods/

 

"Terms of the transaction were not disclosed."

 

[Viking]

1 hour ago, Haryana said:

 

just another article on the same

 

https://www.foodbev.com/news/fairfax-financial-to-acquire-significant-stake-in-meadow-foods/

 

"Terms of the transaction were not disclosed."

 

 

Meadow Foods web site: "MEADOW HAS GROWN OVER 30 YEARS INTO A £550M VALUE-ADDED INGREDIENTS BUSINESS SPECIALISING IN THE DAIRY, CONFECTIONERY, ICE CREAM, PREPARED FOODS AND PLANT-BASED INDUSTRIES."

• https://meadowfoods.co.uk/about/

 

Meadow Foods just completed an acquisition:

• https://www.exponentpe.com/node/711

Edited August 25, 2023 by Viking

[MMM20]

Does Fairfax have a good track record on acquisitions from private equity? 

 

I'm not familiar with Exponent, but with any acquisition from private equity i reflexively worry that the company has been juicing profits one way or another ahead of a sale.

 

A lot of good businesses in the UK seem cheap right now. I guess it comes down to price.

 

Happy to see it as long as it's not a turnaround!

 

Edited August 25, 2023 by MMM20

[gfp]

Did this already get posted here?

 

https://www.bloomberg.com/news/articles/2023-08-25/veritas-is-said-to-consider-takeover-offer-for-blackberry

[MMM20]

58 minutes ago, gfp said:

Did this already get posted here?

 

https://www.bloomberg.com/news/articles/2023-08-25/veritas-is-said-to-consider-takeover-offer-for-blackberry

 

So... (clears throat)... uh... $BB 

Did I do that right?

 

Edited August 25, 2023 by MMM20

[TwoCitiesCapital]

On 8/25/2023 at 12:34 PM, MMM20 said:

 

So... (clears throat)... uh... $BB 

Did I do that right?

 

 

Looks right to me!

[nwoodman]

For those who like digging around in Fairfax's equity positions, MS released an updated earnings model for Mytilineos (attached).  I agree with all you analyst haters, so treat it in the spirit of "entertainment".   

 

MYTIL, including options, is closing in on being a $US400m position for Fairfax and small in the grander scheme of things.   See it as another example of an FFH asset rapidly regressing to the mean (+89% YTD). MYTIL share price is currently €38.01, MS PT is €45.

 

"MYTIL offers a unique trifecta - multi-faceted Energy growth, unique aluminium business, and highly synergistic business model. These attributes coupled with an undemanding valuation point to a compelling risk-reward." 

 

MYTILINEOS_20230824_2100.pdf

Edited August 29, 2023 by nwoodman

[Viking]

Fairfax's equity holdings (that I track) are up about $597 million so far in Q3 (9 of 13 weeks = 69%). Shaping up to be another quarter of solid performance. Split by accounting treatment can be seen below. I have attached my Excel file if you want a closer look.

 

Top Movers? All up this quarter:

• Thomas Cook India = $156 million
• FFH TRS = $154 million
• Eurobank = $110
• Broad based gains: 6 different equities are up more than $20 million
• Stelco = ($43) million: the largest decliner

 

Fairfax Sept 1 2023.xlsx

Edited September 2, 2023 by Viking