nwoodman Posted November 25 Posted November 25 (edited) 1 hour ago, Hoodlum said: Eurobank announced today that they have increased the remaining share purchase price for Hellenic Bank from €4.58 per share to €4.84 per share with Demetra selling all of their remaining shares. This brings Eurobanks ownership in Hellenic bank to 93.47% and will allow for the delisting of Hellenic Bank. In the new year, Eurobank will issue one last final public offer at €4.84 per share to the remaining shareholders. https://en.protothema.gr/2024/11/25/eurobank-acquires-93-47-of-hellenic-bank/ Superb! So played out something like this: Edited November 25 by nwoodman
Viking Posted November 25 Posted November 25 (edited) Peak Achievement Athletics - The rebuild has been completed On February 28, 2017, Fairfax partnered with Paul Desmarais III and his team at Sagard Holdings to purchase Performance Sports Group out of bankruptcy for total proceeds of US$575 million. The company was subsequently renamed Peak Achievement Athletics. Performance Sports Group was a leading developer and manufacturer of sports equipment: Hockey - Bauer (#1 player) https://ca.bauer.com Baseball - Easton (#3 player) Lacrosse - Cascade and Maverik (combined, #1 player?) https://cascademaverik.com Performance Sports Group completes sale of substantially all of its assets to investor group led by Sagard and Fairfax Financial - Article from Feb 27, 2017 https://www.torys.com/en/work/2016/10/52382aeb-7e85-42dd-903c-309be9bb261a Why did Performance Sports Group go into bankruptcy? The primary problem wasn’t the business. It was the management team in place at the time - their decisions were terrible (changing their distribution strategy in Canada for Bauer and grossly overpaying for Easton are just two examples). Click the link below for details. Behind the bankruptcy of Performance Sports Group - Article from November 10, 2016 https://www.nhbr.com/behind-the-bankruptcy-of-performance-sports-group/#:~:text=Graeme%20Roustan%2C%20who%20blames%20the,time%20to%20arrange%20a%20sale. Details of the partnership In 2017, Fairfax and Sagard each invested $154 million (C$204 million). Each company held a 42.6% equity interest and 50% of the voting rights in Peak. The investment was accounted for using the equity method. It was not disclosed who owned the remaining 14.8% equity position in Peak. It is interesting that Performance Sports was purchased for total consideration of $575 million and Fairfax and Sagard only invested a total of $308 million (for their 85.2% interest). Who is Sagard Holdings? Sagard is a global multi-strategy alternative asset management firm active in venture capital, private equity, private credit, and real estate. https://www.sagard.com Sagard was launched in 2002 by the Desmarais family, which controls Montreal-based financial services giant Power Corp. of Canada. The aim was to invest in entrepreneurs and support the growth of middle-market businesses there. Fairfax has built out a wonderful capital allocation platform When deciding what to do with its $69 billion investment portfolio, Fairfax has build out an exceptionally diverse platform within the company that allows it to go to where the opportunity is at any given point in time - in public or private markets. In the case of Peak, Fairfax invested in the private market and like an alternative asset management firm. Fairfax’s partnership with Sagard is another good example of the many partnerships/relationships that Fairfax has been patiently building out over their 38 years of existence as a company. The benefits of what Fairfax has created are far reaching (future deal flow being just one example). The key take-away is Fairfax is extremely flexible with its capital allocation framework. This should lead to better diversification (lower portfolio risk) and better total returns over time. Today, Fairfax’s capability when it comes to capital allocation (structure, expertise, partnerships) is unique in the P/C insurance industry. It has become an important sustainable competitive advantage for the company. Back to our story. Strengthen Easton - 2020 In October of 2020, the Easton unit of Peak was acquired by Rawlings Sporting Goods. Easton was the #3 player in baseball and Rawlings was the clear #1 player. In the deal, Peak received $65 million in cash and a 28% stake in Rawlings. Importantly, this deal was done when Covid was raging and demand for all sports equipment (baseball, hockey and lacrosse) had fallen dramatically. Peak got a timely cash infusion and ownership in a much larger, stronger baseball company. The turnaround at Peak The turnaround at Peak took a number of years. Covid likely stalled their transformation by a couple of years. But over time, Peak returned to profitability. This can be seen from the distributions that started to happen to the two partners, Fairfax and Sagard. Below are the numbers that Fairfax has reported over the years for its investment in Peak. The sale of Rawlings stake - 2024 In Q2-2024, Peak sold its minority position in Rawlings Sporting Goods. A sale price was not disclosed. However, in Q2-2024, Sagard reported receiving a dividend of $60 million from Peak. Fairfax reported YTD September 30, 2024, share of profit of associated of $52 million, and said the elevated amount was due to the sale of Rawlings. Fairfax takes out partner Sagard There were rumours that Peak was being shopped. It is interesting that Fairfax ended up being the buyer. From an article in the Globe and Mail on August 24, 2024: “Sagard and Fairfax acquired Bauer out of bankruptcy in 2017 for US$575-million and are targeting a US$800-million exit, according to one of the sources. Bauer’s EBITDA is just more than US$100-million annually, the source said.” https://www.theglobeandmail.com/business/article-ccm-bauer-true-hockey-sale/#:~:text=Sagard%20and%20Fairfax%20acquired%20Bauer,to%20one%20of%20the%20sources. On September 30, 2024, Peak announced that Fairfax had bought out partner Sagard. The purchase will see Fairfax will double their ownership stake in Peak from 42.6% to 85.2%. Fairfax paid $325 million for Sagard’s 42.6% stake. This values Peak at $763 million. Power Corp (owner of Sagard) provided the financial details of the transaction: “On September 30, 2024, Peak announced that Fairfax will acquire Sagard’s 42.6% interest in Peak. On close of the transaction, the Corporation expects proceeds of approximately US$325 million, and to recognize a gain in net earnings of approximately US$195 million. The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.” Why did Fairfax buy out Sagard? Here are some thoughts: Fairfax likes the management team. Fairfax likes the long term return potential of the business. Culture wise, Peak is a good fit for Fairfax. The takeout of Sagard is following a very familiar playbook for Fairfax. Over the past 4 years, the majority of their capital allocation decisions has involved them buying more of stuff they already own. This is a very effective strategy for the following three reasons: The investment they are making falls into their circle of competence. They are able to value the asset well, allowing them to buy with a margin of safety. Growing the size of current investments allows them to concentrate in their best ideas. This is capital allocation 101 - simple, smart and effective. The kind of capital allocation preached by Warren Buffett, Charlie Munger and Peter Lynch. Here is what Wade Burton (President, Chief Investment Officer, Hamblin Watsa) had to say on Fairfax’s Q3-2024 earnings conference call: “We did make one significant announcement in the quarter. We bought out our main partners in Peak Achievement, an athletic wear and equipment company focused on hockey and lacrosse. It is an outstanding business operating in a highly consolidated industry, well run by Ed Kinnaly and his team, incredible track record, and we paid a fair price. We think we will make a very good return over the long run for our shareholders, and importantly, Ed runs the company very much in tune with the Fairfax culture.” “Looking back over the last two years, we’ve made three significant long term equity investments, one in Meadow Dairy, a dominant milk ingredients company in the U.K. that is doing very well; another in Sleep Country, a dominant mattress distributor and retailer in Canada; and now a third, Peak, a dominant sporting goods company focused on hockey and lacrosse. All immediately are or will contribute to our earnings, and we believe all will continue to contribute more and more as their businesses progress.” The non-insurance consolidated companies income stream at Fairfax gets bigger Fairfax continues to make material additions to its collection of non-insurance consolidated company holdings. In 2022, it took Recipe private. In 2023, it purchased Meadow Foods. In 2024, it took Sleep Country private. Peak was an associate holding for Fairfax. On close, Peak will become a consolidated holding. These additions are materially growing the size of this income stream for Fairfax. Here is what Jennifer Allen (Vice President, Chief Financial Officer) had to say on Fairfax’s Q3-2024 earnings conference call: “As Wade noted, with our recently announced Sleep Country and Peak Achievement transactions, we expect the operating income from our non- insurance companies reporting segment will grow in the future periods, reflecting the operating income diversity these investments will add to the segment.” Is a sizeable investment gain coming for Fairfax at close? Sagard is reporting that they expect to book an investment gain of $195 million when the deal closes. Perhaps this is what we also see from Fairfax. At December 30, 2023, Fairfax had a carrying value of $119 million for its 42.6% stake in Peak. Revaluing this to $325 million would result in a significant investment gain. How has Fairfax done with their investment in Peak? My math says Fairfax has generated a total return of about $243 million on its $154 million initial investment in Peak over the past 8 years. This is a CAGR of 12.6%. The dividends received of $72 million is to December 30, 2023. It is likely that Fairfax has received another dividend payment from Peak in 2024 (especially given the sale of their stake in Rawlings). We will likely get an update from Fairfax when they release their 2024 annual report. ————— Notes from Fairfax annual and quarterly reports: 2024 Q3 Report Consolidated share of profit of associates of $609.3 in the first nine months of 2024 principally reflected share of profit of $343.7 from Eurobank, $163.0 from Poseidon and $52.3 from Peak Achievement (principally reflecting its sale of Rawlings Sporting Goods), partially offset by share of loss of $60.1 from Sanmar Chemicals Group. 2023AR Fairfax continues to jointly own Peak Achievement with our partner, Sagard Holdings. Peak’s core brands are Bauer, the leading hockey brand, and Maverik, a leading lacrosse brand. Peak also owns a minority investment in Rawlings, which is the number one brand in baseball. Fairfax paid $154 million for its stake in Peak in 2017. Since that time, EBITDA has increased steadily in the hockey and lacrosse businesses, and Fairfax has received $72 million in dividends. Hockey participation growth continues post-pandemic and exciting developments such as Bauer’s partnership with the new Professional Women’s Hockey League are expected to drive incremental girls’ participation. More to come under CEO Ed Kinnaly’s leadership, with opportunities in direct-to-consumer, apparel and training. We carry Peak on our balance sheet at less than 5x free cash flow. 2020AR Fairfax continues to jointly own Peak Achievement with our partner, Sagard Holdings led by Paul Desmarais III. Peak’s core assets are Bauer, the leading hockey brand, and Easton, the number three manufacturing player in baseball. During 2020 Peak merged Easton with Rawlings, the clear number one manufacturer in baseball. The transaction resulted in $65 million cash paid to Peak, while retaining a 28% stake in Rawlings. Peak is now partnered with Rawlings’ controlling shareholder, Seidler Equity Partners. Fairfax recognized a $15 million gain on the sale of Easton which closed just before year end. 2017AR On March 1, 2017 the restructuring of Performance Sports Group Ltd. (‘‘PSG’’) was substantially completed after all of the assets and certain related operating liabilities of PSG were sold to an intermediate holding company (‘‘Performance Sports’’) co-owned by Fairfax and Sagard Holdings Inc. The company’s $153.5 equity investment in Performance Sports represents a voting interest of 50.0% and an equity interest of 42.6%. On April 3, 2017 Performance Sports was renamed Peak Achievement Athletics Inc. (‘‘Peak Achievement’’). 2016AR Also, early in 2017 we partnered with Paul Desmarais III and his excellent team at Sagard Capital to purchase Performance Sports. Performance Sports is the owner of the leading names in hockey, baseball and lacrosse equipment: Bauer, Easton and Cascade. ————— Notes from Power Corp’s annual and quarterly reports: Power Corp Q3, 2024 Interim Report Peak: Sagard held a 42.6% equity interest and a 50% voting interest in Peak at September 30, 2024 (same as at December 31, 2023). Peak designs, develops and commercializes sports equipment and apparel for ice hockey and lacrosse under iconic brands including Bauer. The Corporation’s investment is accounted for using the equity method. During the second quarter of 2024, Peak disposed of its minority interest in Rawlings Sporting Goods Company Inc. (Rawlings), a leading brand in baseball. In July 2024, Sagard received a distribution of US$60 million from Peak. On September 30, 2024, Peak announced that Fairfax will acquire Sagard’s 42.6% interest in Peak. On close of the transaction, the Corporation expects proceeds of approximately US$325 million, and to recognize a gain in net earnings of approximately US$195 million. The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions. Power Corp 2017AR On February 27, 2017, Peak Achievement Athletics Inc. (Peak), an acquisition vehicle jointly controlled by Sagard Holdings and Fairfax Financial Holdings Limited, completed the acquisition of the assets of Performance Sports Group, Ltd. for total consideration of US$575 million. Peak designs and markets sports equipment and apparel for ice hockey, baseball, softball and lacrosse under iconic brands including Bauer and Easton. At December 31, 2017, the Corporation had invested $204 million (US$154 million) in Peak. Sagard Holdings holds a 42.6% equity interest and 50% of the voting rights in Peak. The Corporation’s investment is accounted for using the equity method. —————— Edited November 26 by Viking
Hoodlum Posted November 25 Posted November 25 25 minutes ago, Viking said: Peak Achievement Athletics - The rebuild has been completed On February 28, 2017, Fairfax partnered with Paul Desmarais III and his team at Sagard Holdings to purchase Performance Sports Group out of bankruptcy for total proceeds of US$575 million. The company was subsequently renames Peak Achievement Athletics. Performance Sports Group was a leading developer and manufacturer of sports equipment: Hockey - Bauer (#1 player) https://ca.bauer.com Baseball - Easton (#3 player) Lacrosse - Cascade and Maverik (combined, #1 player?) https://cascademaverik.com Performance Sports Group completes sale of substantially all of its assets to investor group led by Sagard and Fairfax Financial - Article from Feb 27, 2017 https://www.torys.com/en/work/2016/10/52382aeb-7e85-42dd-903c-309be9bb261a Why did Performance Sports Group go into bankruptcy? The primary problem wasn’t the business. It was the management team in place at the time - their decisions were terrible (changing their distribution strategy in Canada for Bauer and grossly overpaying for Easton are just two examples). Click the link below for details. Behind the bankruptcy of Performance Sports Group - Article from November 10, 2016 https://www.nhbr.com/behind-the-bankruptcy-of-performance-sports-group/#:~:text=Graeme%20Roustan%2C%20who%20blames%20the,time%20to%20arrange%20a%20sale. Details of the partnership In 2017, Fairfax and Sagard each invested $154 million (C$204 million). Each company held a 42.6% equity interest and 50% of the voting rights in Peak. The investment was accounted for using the equity method. It was not disclosed who owned the remaining 14.8% equity position in Peak. It is interesting that Performance Sports was purchased for total consideration of $575 million and Fairfax and Sagard only invested a total of $308 million (for their 85.2% interest). Who is Sagard Holdings? Sagard is a global multi-strategy alternative asset management firm active in venture capital, private equity, private credit, and real estate. https://www.sagard.com Sagard was launched in 2002 by the Desmarais family, which controls Montreal-based financial services giant Power Corp. of Canada. The aim was to invest in entrepreneurs and support the growth of middle-market businesses there. Fairfax has built out a wonderful capital allocation platform When deciding what to do with its $69 billion investment portfolio, Fairfax has build out an exceptionally diverse platform within the company that allows it to go to where the opportunity is at any given point in time - in public or private markets. In the case of Peak, Fairfax invested in the private market and like an alternative asset management firm. Fairfax’s partnership with Sagard is another good example of the many partnerships/relationships that Fairfax has been patiently building out over their 38 years of existence as a company. The benefits of what Fairfax has created are far reaching (future deal flow being just one example). The key take-away is Fairfax is extremely flexible with its capital allocation framework. This should lead to better diversification (lower portfolio risk) and better total returns over time. Today, Fairfax’s capability when it comes to capital allocation (structure, expertise, partnerships) is unique in the P/C insurance industry. It has become an important sustainable competitive advantage for the company. Back to our story. Strengthen Easton - 2020 In October of 2020, the Easton unit of Peak was acquired by Rawlings Sporting Goods. Easton was the #3 player in baseball and Rawlings was the clear #1 player. In the deal, Peak received $65 million in cash and a 28% stake in Rawlings. Importantly, this deal was done when Covid was raging and demand for all sports equipment (baseball, hockey and lacrosse) had fallen dramatically. Peak got a timely cash infusion and ownership in a much larger, stronger baseball company. The turnaround at Peak The turnaround at Peak took a number of years. Covid likely stalled their transformation by a couple of years. But over time, Peak returned to profitability. This can be seen from the distributions that started to happen to the two partners, Fairfax and Sagard. Below are the numbers that Fairfax has reported over the years for its investment in Peak. The sale of Rawlings stake - 2024 In Q2-2024, Peak sold its minority position in Rawlings Sporting Goods. A sale price was not disclosed. However, in Q2-2024, Sagard reported receiving a dividend of $60 million from Peak. Fairfax reported YTD September 30, 2024, share of profit of associated of $52 million, and said the elevated amount was due to the sale of Rawlings. Fairfax takes out partner Sagard There were rumours that Peak was being shopped. It is interesting that Fairfax ended up being the buyer. From an article in the Globe and Mail on August 24, 2024: “Sagard and Fairfax acquired Bauer out of bankruptcy in 2017 for US$575-million and are targeting a US$800-million exit, according to one of the sources. Bauer’s EBITDA is just more than US$100-million annually, the source said.” https://www.theglobeandmail.com/business/article-ccm-bauer-true-hockey-sale/#:~:text=Sagard%20and%20Fairfax%20acquired%20Bauer,to%20one%20of%20the%20sources. On September 30, 2024, Peak announced that Fairfax had bought out partner Sagard. The purchase will see Fairfax will double their ownership stake in Peak from 42.6% to 85.2%. Fairfax paid $325 million for Sagard’s 42.6% stake. This values Peak at $763 million. Power Corp (owner of Sagard) provided the financial details of the transaction: “On September 30, 2024, Peak announced that Fairfax will acquire Sagard’s 42.6% interest in Peak. On close of the transaction, the Corporation expects proceeds of approximately US$325 million, and to recognize a gain in net earnings of approximately US$195 million. The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.” Why did Fairfax buy out Sagard? Here are some thoughts: Fairfax likes the management team. Fairfax likes the long term return potential of the business. Culture wise, Peak is a good fit for Fairfax. The takeout of Sagard is following a very familiar playbook for Fairfax. Over the past 4 years, the majority of their capital allocation decisions has involved them buying more of stuff they already own (and understand exceptionally well). This is capital allocation 101 - simple, smart and effective. Here is what Wade Burton (President, Chief Investment Officer, Hamblin Watsa) had to say on Fairfax’s Q3-2024 earnings conference call: “We did make one significant announcement in the quarter. We bought out our main partners in Peak Achievement, an athletic wear and equipment company focused on hockey and lacrosse. It is an outstanding business operating in a highly consolidated industry, well run by Ed Kinnaly and his team, incredible track record, and we paid a fair price. We think we will make a very good return over the long run for our shareholders, and importantly, Ed runs the company very much in tune with the Fairfax culture.” “Looking back over the last two years, we’ve made three significant long term equity investments, one in Meadow Dairy, a dominant milk ingredients company in the U.K. that is doing very well; another in Sleep Country, a dominant mattress distributor and retailer in Canada; and now a third, Peak, a dominant sporting goods company focused on hockey and lacrosse. All immediately are or will contribute to our earnings, and we believe all will continue to contribute more and more as their businesses progress.” The non-insurance consolidated companies income stream at Fairfax gets bigger Fairfax continues to make material additions to its collection of non-insurance consolidated company holdings. In 2022, it took Recipe private. In 2023, it purchased Meadow Foods. In 2024, it took Sleep Country private. Peak was an associate holding for Fairfax. On close, Peak will become a consolidated holding. These additions are materially growing the size of this income stream for Fairfax. Here is what Jennifer Allen (Vice President, Chief Financial Officer) had to say on Fairfax’s Q3-2024 earnings conference call: “As Wade noted, with our recently announced Sleep Country and Peak Achievement transactions, we expect the operating income from our non- insurance companies reporting segment will grow in the future periods, reflecting the operating income diversity these investments will add to the segment.” Is a sizeable investment gain coming for Fairfax at close? Sagard is reporting that they expect to book an investment gain of $195 million when the deal closes. Perhaps this is what we also see from Fairfax. At December 30, 2023, Fairfax had a carrying value of $119 million for its 42.6% stake in Peak. Revaluing this to $325 million would result in a significant investment gain. How has Fairfax done with their investment in Peak? My math says Fairfax has generated a total return of about $243 million on its $154 million initial investment in Peak over the past 8 years. This is a CAGR of 12.6%. The dividends received of $72 million is to December 30, 2023. It is likely that Fairfax has received another dividend payment from Peak in 2024 (especially given the sale of their stake in Rawlings). We will likely get an update from Fairfax when they release their 2024 annual report. ————— Notes from Fairfax annual and quarterly reports: 2024 Q2 Report Consolidated share of profit of associates of $221.4 in the second quarter of 2024 principally reflected share of profit of $126.1 from Eurobank, $66.5 from Poseidon and $31.5 from Peak Achievement (principally reflecting its sale of Rawlings Sporting Goods), partially offset by share of loss of $39.0 from Sanmar Chemicals Group. 2023AR Fairfax continues to jointly own Peak Achievement with our partner, Sagard Holdings. Peak’s core brands are Bauer, the leading hockey brand, and Maverik, a leading lacrosse brand. Peak also owns a minority investment in Rawlings, which is the number one brand in baseball. Fairfax paid $154 million for its stake in Peak in 2017. Since that time, EBITDA has increased steadily in the hockey and lacrosse businesses, and Fairfax has received $72 million in dividends. Hockey participation growth continues post-pandemic and exciting developments such as Bauer’s partnership with the new Professional Women’s Hockey League are expected to drive incremental girls’ participation. More to come under CEO Ed Kinnaly’s leadership, with opportunities in direct-to-consumer, apparel and training. We carry Peak on our balance sheet at less than 5x free cash flow. 2020AR Fairfax continues to jointly own Peak Achievement with our partner, Sagard Holdings led by Paul Desmarais III. Peak’s core assets are Bauer, the leading hockey brand, and Easton, the number three manufacturing player in baseball. During 2020 Peak merged Easton with Rawlings, the clear number one manufacturer in baseball. The transaction resulted in $65 million cash paid to Peak, while retaining a 28% stake in Rawlings. Peak is now partnered with Rawlings’ controlling shareholder, Seidler Equity Partners. Fairfax recognized a $15 million gain on the sale of Easton which closed just before year end. 2017AR On March 1, 2017 the restructuring of Performance Sports Group Ltd. (‘‘PSG’’) was substantially completed after all of the assets and certain related operating liabilities of PSG were sold to an intermediate holding company (‘‘Performance Sports’’) co-owned by Fairfax and Sagard Holdings Inc. The company’s $153.5 equity investment in Performance Sports represents a voting interest of 50.0% and an equity interest of 42.6%. On April 3, 2017 Performance Sports was renamed Peak Achievement Athletics Inc. (‘‘Peak Achievement’’). 2016AR Also, early in 2017 we partnered with Paul Desmarais III and his excellent team at Sagard Capital to purchase Performance Sports. Performance Sports is the owner of the leading names in hockey, baseball and lacrosse equipment: Bauer, Easton and Cascade. ————— Notes from Power Corp’s annual and quarterly reports: Power Corp Q3, 2024 Interim Report Peak: Sagard held a 42.6% equity interest and a 50% voting interest in Peak at September 30, 2024 (same as at December 31, 2023). Peak designs, develops and commercializes sports equipment and apparel for ice hockey and lacrosse under iconic brands including Bauer. The Corporation’s investment is accounted for using the equity method. During the second quarter of 2024, Peak disposed of its minority interest in Rawlings Sporting Goods Company Inc. (Rawlings), a leading brand in baseball. In July 2024, Sagard received a distribution of US$60 million from Peak. On September 30, 2024, Peak announced that Fairfax will acquire Sagard’s 42.6% interest in Peak. On close of the transaction, the Corporation expects proceeds of approximately US$325 million, and to recognize a gain in net earnings of approximately US$195 million. The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions. Power Corp 2017AR On February 27, 2017, Peak Achievement Athletics Inc. (Peak), an acquisition vehicle jointly controlled by Sagard Holdings and Fairfax Financial Holdings Limited, completed the acquisition of the assets of Performance Sports Group, Ltd. for total consideration of US$575 million. Peak designs and markets sports equipment and apparel for ice hockey, baseball, softball and lacrosse under iconic brands including Bauer and Easton. At December 31, 2017, the Corporation had invested $204 million (US$154 million) in Peak. Sagard Holdings holds a 42.6% equity interest and 50% of the voting rights in Peak. The Corporation’s investment is accounted for using the equity method. —————— Thanks @Viking for the detailed outline of the Peak transaction history and summary. It is a little easier now to understand the Peak investment with Bauer becoming the main business. It will be interesting to see the dividend capacity in 2025 for Peak, as this should give us an idea of what to expect going forward.
Hoodlum Posted November 26 Posted November 26 (edited) On 11/25/2024 at 7:55 AM, nwoodman said: Superb! So played out something like this: This was not mentioned in the previous link I provided on Eurobank, but not surprising. https://cyprus-mail.com/2024/11/26/hellenic-bank-to-merge-with-eurobank-following-e1-2-billion-deal/ According to analysts familiar with the process involved, if the February public offer does not result in full acquisition, a so-called squeeze-out mechanism will be employed, allowing Eurobank to acquire the remaining shares by legal mandate. Edited November 26 by Hoodlum
nwoodman Posted November 26 Posted November 26 Eurobank – Plum | Expanding Strategic Partnership “Eurobank expanded its strategic partnership with UK-based Plum Fintech Limited ("Plum") by advancing a second €5 million minority capital investment to Plum, one of Europe's fastest-growing fintechs that has built a "smart money management" app. With its new investment in the company, Eurobank has invested a total of €10 million in Plum and is becoming one of its main financiers. At the same time, Plum has successfully completed its second fundraising round, raising a total of ~€18.4 millionfrom Eurobank and third-party investors.” Some notes attached on Plum Fintech Ltd. Interesting that Plum’s CEO, Victor Trokoudes, is ex Transfer Wise (WISE.L). I hadn’t made the link previously. A recent interview: Plum Fintech.pdf
Viking Posted November 27 Posted November 27 (edited) Eurobank Update - The Hellenic Bank acquisition is a game changer Introduction Over the past 3.9 years, the market value of Fairfax’s position in Eurobank has grown from $900 million to $2.7 billion, an increase of $1.8 billion or 204%, which is a CAGR = 33%. Yes, that has been exceptional performance. As a result, Eurobank has been a home run investment for Fairfax and its investors over the past 4 years. Fairfax’s total equity portfolio has a market value of about $20 billion. With a market value of $2.7 billion, Eurobank is a 14% position for Fairfax. This makes Eurobank Fairfax’s largest equity holding - by far. If your largest positions perform well then your total portfolio return will probably also do well. Despite its stellar performance the past 4 years, Eurobank looks like it is very well positioned to continue to perform well in the coming years. In the rest of this post we will look into the past (what happened at Eurobank?) and then we will pivot and look into the future (what does the future of Eurobank look like?). What happened at Eurobank? Two things happened at Eurobank to spike its earnings and stock price: The management team at Eurobank continued to execute exceptionally well. Their strategic decisions over the past 6 years have been especially good. External forces in Greece shifted from major headwinds to major tailwinds: The EU abandoned its zero interest rate regime. Higher interest rates spiked interest income for banks. Politically, Greece pivoted hard to more of a capitalist/free market economy. Pro-business reforms have resulted in Greece having one of the top performing economies in Europe in recent years and this is expected to continue in the coming years. Greece’s economy has gone from depression to rapid growth. The result of these two developments saw Eurobank deliver a 378% return to investors over the past 3.9 years. What does the future of Eurobank look like? After such a stellar run, is Eurobank’s stock now priced for perfection? My guess is no. For a couple of important reasons: Greece’s economy is poised to do well in the coming years. Eurobank’s management team is excellent. That is a great combination. Importantly, the management team at Eurobank has already set the table for Eurobank to continue to deliver strong results in the coming years. What did they do? A bunch of things. In the rest of this post we are going to focus on one of their strategic decisions - the purchase of Hellenic Bank in Cyprus. Cypress Scale matters in banking. A lot. Eurobank is very well positioned in Greece and Bulgaria. In 2023, Eurobank made the decision to exit Serbia, and sell its bank (that had #8 market share). Smart. Eurobank also had a presence in Cyprus (the # 3 bank). Eurobank decided Cyprus was a country it wanted to grow in. So in 2021 it acquired a small stake in Hellenic Bank, the #2 bank in Cyprus. Over 2022 and 2023, Eurobank increased its ownership in Hellenic Bank to 55%. And in the last two weeks, to 94%. The takeover of Hellenic Bank will be completed in Q1 2025. This is a game changer for Eurobank. Eurobank Cyprus and Hellenic Bank make Eurobank a powerhouse in banking in Cyprus. In 2024, Hellenic Bank also expanded into insurance with the acquisition of CNP Cyprus. But we are getting ahead of ourselves. Let’s review the Hellenic Bank acquisition. Hellenic Bank Eurobank obtained full control of Eurobank on November 25, 2024 with the takeout of the 2 remaining large shareholders. Eurobank acquires full control of Hellenic Bank https://knews.kathimerini.com.cy/en/business/eurobank-acquires-full-control-of-hellenic-bank Price paid matters. Eurobank will pay a total of about $1.36 billion to acquire 100% of Hellenic Bank. It has been a 4-year journey. The table below shows each of the moves made by the management team at Eurobank. Slow. Steady. Methodical. How much is Hellenic Bank earning? Hellenic Bank is poised to earn about $772 million total in 2023 and 2024 = $386 million on average. Eurobank is paying about 3.36 x expected average 2023/2024 earnings. That is exceptional value. Is Hellenic Bank over earning? We will get our answer to this question in the coming years. Interest income is likely over earning (with the ECB cutting interest rates). But Eurobank has many levers to pull to significantly grow profits in other areas. What are some tailwinds to profitability of Hellenic Bank/Eurobank Cypress? 1.) Grow the top line - Hellenic bank has a number of things it can do to grow its top line. There is a significant opportunity to grow Hellenic Bank’s loan book. Expansion into insurance In April 2024, Hellenic Bank announced it was making a major expansion into insurance (life and P/C) in Cyprus with the purchase of CNP Cyprus for €182 million. This deal is expected to close in Q1 2025. Acquisition of CNP Cyprus solidifies Hellenic Bank's dominance in Cypriot insurance market https://knews.kathimerini.com.cy/en/business/€182m-deal-marks-hellenic-s-strategic-move-into-insurance-sector Hellenic Bank has lots of excess capital – this looks like a smart move. This move also fits very well with Eurobank/Fairfax (Fairfax owns Eurolife, one of the largest life insurance companies in Greece). Slide from Hellenic Bank’s Q3 2024 earnings presentation 2.) Reduce expenses - merge Eurobank Cyprus and Hellenic Bank On November 26, 2024 it was reported that Eurobank will be merging Hellenic Bank with Eurobank Cyprus. This will be a multi-year process and should lead to a stronger bank in Cyprus. Over time, it should also result in significant cost savings. Remember, there is also a third leg to this stool - and that is Hellenic Bank’s insurance acquisition. There are really three businesses to be integrated in Cyprus: Eurobank Cyprus, Hellenic Bank and CNP Cyprus. Hellenic Bank to merge with Eurobank following €1.2 billion deal https://cyprus-mail.com/2024/11/26/hellenic-bank-to-merge-with-eurobank-following-e1-2-billion-deal/ 3.) Synergies The synergies from combining the three businesses should be significant. We already mentioned cost savings. But importantly, there will also be cross-selling opportunities which should result in revenue growth. Summary Eurobank has made a number of significant strategic decisions in recent years. The biggest was the decision to aggressively expand in Cyprus with the purchase of Hellenic Bank. With the announcements the past couple of weeks, all of their hard work is quickly coming together. When Eurobank reports 2024 year-end results next year, we will also get their 2025 business plan. It will be very interesting to see the integration plans for their operations in Cyprus and what the new business/profit outlook is. Cyprus will likely drive a big part of the growth (top and bottom line) for Eurobank in the coming years. But the real lesson of Hellenic Bank is the impact that an exceptional management team can have on business results. Especially over a couple of years. And in a region like Greece (coming out of a depression). The management team at Eurobank looks like they are the real deal. It will be interesting to see what they do in the coming years. ————— Hellenic Bank - Q3-2024 Earnings Presentation https://www.hellenicbank.com/-/media/hbc/announcements/2024/november/9m/9m24_fr-presentation_final.pdf ————— Slide from Eurobank’s Q3-2024 Earnings Presentation The slide below shows the balance sheet of Eurobank and the impact of adding Hellenic Bank. (Eurobank consolidated Hellenic Bank in Q3, 2024, with a control position of 55.5%. In Q1, 2025, its control position will increase to 93.5%.) ————— Presentation on Eurobank by CEO Fokion Karavias in April 2024 Eurobank: A turnaround story https://www.ivey.uwo.ca/media/hznli5um/keynote-fokion-karavias.pdf Edited December 4 by Viking
intothebreach Posted November 27 Posted November 27 Viking, I just want to say thanks for your continued analysis and sharing to the board; I learn something new every time. Much, much appreciated!
Haryana Posted November 28 Posted November 28 https://thebanks.eu/countries/Cyprus/major_banks The combined Eurobank in Cyprus should become the largest bank in the country.
Redskin212 Posted November 28 Posted November 28 Viking loved the analysis on Eurobank. Reminiscent of the Bank of Ireland investment but bigger and bolder. What percentage of Eurobank does Fairfax own? I think I missed it.
Redskin212 Posted November 28 Posted November 28 I looked it up. fairfax owned 34.4% of Eurobank at September 30,2024
Viking Posted November 28 Posted November 28 2 hours ago, intothebreach said: Viking, I just want to say thanks for your continued analysis and sharing to the board; I learn something new every time. Much, much appreciated! @intothebreach , i appreciate the comment. You are welcome. At the end of the day, i post on topics that are of interest / timely / that i want to lean more about. Posting the articles to the board really helps me to focus (I want to get them close to being accurate). And the comments from other board members often provide some additional insights which improves our understanding even more. It really has been a virtuous circle over the past 4 years.
nwoodman Posted November 28 Posted November 28 @Viking like Fairfax, Eurobank still seems incredibly cheap even after a decent revaluation. The best way to own it is via insurance leverage. However, I must confess I broke my own rule of not owning Fairfax positions and picked up some EGFEY last week as a bit of a cashflow non-USD play. Personally think it should be valued closer to €3. Fokion Karavias is a fascinating guy and a top operator. There is something about these chemical engineers that end up in banking/insurance, need to add that to the investment pattern recognition algo Education: • National Technical University of Athens: Earned a degree in Chemical Engineering. • University of Pennsylvania, Philadelphia, USA: Obtained both a Master’s and a Ph.D. in Chemical Engineering. Professional Career: • JPMorgan, New York (1991): Began his banking career in the Market Risk Management Division. • Citibank, Athens (1994): Served as Head of Fixed Income Products and Derivatives in Greece. • Telesis Investment Bank (2000): Held the position of Treasurer. • Eurobank Group (1997–Present): • Joined as Head of Fixed Income and Derivatives Trading. • Progressed through roles including Deputy General Manager and Treasurer (2002–2005), General Manager and Executive Committee Member (2005–2013), and Senior General Manager overseeing Corporate & Investment Banking, Capital Markets & Wealth Management (2014–2015). • Appointed CEO of Eurobank SA and Eurobank Holdings in 2015. Board Memberships and Affiliations: • Hellenic Bank Association (HBA): Vice Chairman of the Board of Directors. • Hellenic Federation of Enterprises (SEV): Member of the General Council. • Greek Tourism Confederation (SETE): Honorary Member of the Board. • Eurobank Private Bank Luxembourg SA: Former Board Member (2012–2022).
Viking Posted November 28 Posted November 28 1 hour ago, Redskin212 said: Viking loved the analysis on Eurobank. Reminiscent of the Bank of Ireland investment but bigger and bolder. What percentage of Eurobank does Fairfax own? I think I missed it. @Redskin212 , I think the success they had with Bank of Ireland is what led them to invest in Eurobank. The difference is Ireland rebounded from their property crisis relatively quickly. So Fairfax’s investment in Bank of Ireland also popped higher pretty quick. Eurobank has played out very differently. Greece did not quickly rebound from its depression (after Fairfax made their initial investment). And Fairfax’s initial investment in Eurobank got completely wiped out by the ECB. But that has all changed over the past 4 years. I wonder if Eurobank is now Fairfax’s best stock investment ever (in terms of total gain). Even after the big gain, it’s interesting/informative that Fairfax has not sold down its Eurobank position. Fairfax likely views the stock as still being significantly undervalued (especially given the current set-up with Hellenic Bank acquisition).
Viking Posted November 28 Posted November 28 (edited) 2 hours ago, nwoodman said: @Viking like Fairfax, Eurobank still seems incredibly cheap even after a decent revaluation. The best way to own it is via insurance leverage. However, I must confess I broke my own rule of not owning Fairfax positions and picked up some EGFEY last week as a bit of a cashflow non-USD play. Personally think it should be valued closer to €3. Fokion Karavias is a fascinating guy and a top operator. There is something about these chemical engineers that end up in banking/insurance, need to add that to the investment pattern recognition algo Education: • National Technical University of Athens: Earned a degree in Chemical Engineering. • University of Pennsylvania, Philadelphia, USA: Obtained both a Master’s and a Ph.D. in Chemical Engineering. Professional Career: • JPMorgan, New York (1991): Began his banking career in the Market Risk Management Division. • Citibank, Athens (1994): Served as Head of Fixed Income Products and Derivatives in Greece. • Telesis Investment Bank (2000): Held the position of Treasurer. • Eurobank Group (1997–Present): • Joined as Head of Fixed Income and Derivatives Trading. • Progressed through roles including Deputy General Manager and Treasurer (2002–2005), General Manager and Executive Committee Member (2005–2013), and Senior General Manager overseeing Corporate & Investment Banking, Capital Markets & Wealth Management (2014–2015). • Appointed CEO of Eurobank SA and Eurobank Holdings in 2015. Board Memberships and Affiliations: • Hellenic Bank Association (HBA): Vice Chairman of the Board of Directors. • Hellenic Federation of Enterprises (SEV): Member of the General Council. • Greek Tourism Confederation (SETE): Honorary Member of the Board. • Eurobank Private Bank Luxembourg SA: Former Board Member (2012–2022). @nwoodman , I agree, Eurobank does look cheap today. I think the banks in the region are selling off due to concerns about falling NIM. Having said that, Eurobank’s stock price has held up well (better than peers). My post earlier was focussed on Hellenic Bank and developments in Cyprus. There are many other interesting angles to Eurobank: 1.) What do you think Eurobank now does with capital return? Do they continue with the 50% payout that they discussed previously? - Because of the significant cash outlay involved in taking Hellenic Bank private, perhaps they do something similar to last year = 30% payout? What do you think the split will be between dividend and share repurchases? - My guess is they will try and do a dividend payout amount similar to what they did this year. Start to build a reputation as a stable, consistent dividend payer. 2.) Hellenic Bank stopped paying a dividend due to Eurobank’s take-over. They are way over capitalized. After Eurobank gets complete control, I wonder if Hellenic Bank doesn’t pay a big dividend to Eurobank - that kind of pays part of the take-out price. Hellenic Bank has been hugely profitable the past 2 years and it was largely just building on their balance sheet (yes, they did purchase CNP Cyprus). The negotiations between Eurobank, Demetra amd Logicom must have been intense. The other big stake was purchased from the Cyprus Union of Bank Employees (ETYK), the Cyprus Bank Employees Welfare Fund, the Cyprus Bank Employees Health Fund and the Financial Sector Provident Fund. This negotiation was likely equally intense. But once it was done, it seemed to be the catalyst to get the agreement with Demetra and Logicom done. Impressive that Eurobank was able to get this deal done. It will be interesting to see how quickly they move to rightsize the three companies (Eurobank Cyprus, Hellenic Bank and CNP Cypus). They will likely be very thoughtful in what they do. My guess is they see enormous potential in what they have in Cyprus. 3.) Expansion of wealth management at Eurobank. This will be something to watch. Perhaps this is where we see future acquisitions. Combined with a slow and steady build-out - like they have been doing this year. 4.) The partnership between Eurobank and Fairfax certainly looks like it is working for both companies. It allows the Eurobank team to think long term when making decisions. It also allows them to take calculated risks to grow their business. Very unusual for a publicly traded company - and especially a bank - in that region. I hope it continues to cement at Fairfax (and Hamblin Watsa) the importance of management when they make new equity investments. I think Fairfax ‘gets it’ more today than they ever have. Edited November 28 by Viking
Haryana Posted November 28 Posted November 28 2 hours ago, nwoodman said: There is something about these chemical engineers that end up in banking/insurance, need to add that to the investment pattern recognition algo I see what you mean. Prem Watsa did Bachelor of Technology in Chemical engineering from Indian Institute of Technology. Apparently they apply alchemy to financial engineering.
Haryana Posted November 28 Posted November 28 That looks fair and friendly right there - "Additionally, Etyk sold its 12.85 per cent stake for €243 million, with the price per share adjusted to match that offered to Demetra and Logicom. Sources close to Eurobank, cited by local outlet Stockwatch, explained that the adjustment aligns with standard business practices, as the transaction with Etyk occurred just 10 days prior at a lower price of €4.58 per share." https://cyprus-mail.com/2024/11/26/hellenic-bank-to-merge-with-eurobank-following-e1-2-billion-deal
nwoodman Posted November 28 Posted November 28 (edited) In terms of Eurobank buybacks, Fairfax currently sits at 32.93% from YE 23 annual report. As far as I can tell, 33% is a key threshold (Article 24 of Greek Banking Law 4261/2014, aligned with CRD IV and enforced by the Bank of Greece). "Crossing the 33% threshold means Fairfax would have “significant influence” over Eurobank under regulatory definitions. This can result in additional scrutiny and obligations, including: • Regulatory Approval: • Fairfax would need to apply to the Bank of Greece to increase its stake beyond 33%. • The approval process would involve assessing Fairfax’s financial health, governance practices, and the impact of its increased influence on Eurobank’s operations. • Suitability Review: • Fairfax’s ability to contribute to the stability of Eurobank would be evaluated. • Regulators might scrutinize Fairfax’s other investments, its financial strength, and its strategic intentions for Eurobank. • Increased Oversight: • Greater regulatory oversight may apply to Fairfax, especially if it is perceived as the controlling shareholder. This could involve regular disclosures and accountability for Eurobank’s governance and strategic decisions." 1. Fairfax could always sell into the buyback, but would they want to? 2. They could always seek approval to cross over the threshold, but if they felt that way, I think they would have pushed for it when this was a true 25c dollar. This may change Some notes attached. It's still a good story for Fairfax, even if proves to be a stream of divs Edit: It looks like they are already at 33.29% as of Q3 24 https://www.eurobankholdings.gr/en/investor-relations/shareholders/shareholding-structure#:~:text=The percentages of Eurobank Holdings' voting rights,Group Companies (CGC)*** * Helikon Investments Limited**** Threshold notes.pdf Edited November 28 by nwoodman
gfp Posted November 28 Posted November 28 (edited) Fairfax went over 33% of Eurobank back when EUROB merged with Grivalia Properties, which Fairfax had a large investment in. (I should say large ownership stake, not large investment - FFH owned 51% of Grivalia, which itself had been spun out of Eurobank years earlier) The government would have had to approve the ownership level at that time. Prem has met with each Prime Minister since, so I'm sure he is on top of government relations. The dividends have just started to flow and I don't think Fairfax will sell any shares any time soon. Edited November 28 by gfp
nwoodman Posted November 28 Posted November 28 (edited) On 11/28/2024 at 5:00 PM, gfp said: Fairfax went over 33% of Eurobank back when EUROB merged with Grivalia Properties, which Fairfax had a large investment in. (I should say large ownership stake, not large investment - FFH owned 51% of Grivalia, which itself had been spun out of Eurobank years earlier) The government would have had to approve the ownership level at that time. Prem has met with each Prime Minister since, so I'm sure he is on top of government relations. The dividends have just started to flow and I don't think Fairfax will sell any shares any time soon. Very happy to be wrong as I think Eurobank would be wise to repurchase shares here. Not to mention the conflict of capital return decisions that may be at odds with the other 67% of shareholders Edit: fixed typo Edited November 29 by nwoodman
73 Reds Posted November 28 Posted November 28 (edited) 14 hours ago, intothebreach said: Viking, I just want to say thanks for your continued analysis and sharing to the board; I learn something new every time. Much, much appreciated! +1. @Viking, if you ever wanted a job with your favorite company just send Prem a copy of your last few years' worth of analysis. He'd be crazy not to hire you. Edited November 28 by 73 Reds punctuation
Xerxes Posted November 28 Posted November 28 2 hours ago, nwoodman said: Very happy to be wrong as I think Eurobank would be wise to repurchase shares here. Not to mention the conflict of capital return decisions that may be at odds with the other 77% of shareholders It is hard to imagine a financial institution buying back for the sake of increasing the % ownership of its largest investor which happens to be foreign at that. stock buyback does tend to benefit institutional investor than retail, even though the economics are identical. what does an old retire tells his wife when he needs to spin a story as to how his “ownership” increase is a good thing as oppose to actual cash dividend. it is possible that some years down the road Eurobank may do large buyback as a private placement between it and Fairfax.
Viking Posted November 28 Posted November 28 (edited) The depression in Greece has resulted in a massive consolidation in banking. As a result, Greece has 4 large banks today, each with a little over 20% market share on average. With the merger of Eurobank Cyprus and Hellenic Bank, Cyprus has 2 large banks. Oligopolies that play nicely typically earn outsized profits. (Canada has an oligopoly in banking and it has been the best performing asset class in our stock market over the past 30 years). I think that is what we are likely going to see in Greece and Cyprus moving forward. Eurobank is over capitalized (Hellenic Bank is really over capitalized). And they are poised to earn a lot of money in the coming years. This means capital allocation is super important. This means the management team is super important. Based on the past 5 or 6 years, I think it is safe to say that when it comes to capital allocation, the management team at Eurobank is best in class. A best in class management team combined with lots of excess capital is a wonderful thing for a long term investor. Especially if this dynamic lasts for years (high profitability). My guess is the management team at Eurobank will be very rational with how it allocates capital moving forward. They were very rational in the past… so it makes sense this will continue. In recent years, once their balance sheet got fixed and their new earnings trajectory got established, the management team has prioritized returning capital to investors. first they bought back stock. And then this year they re-introduced a dividend. I expect they will continue to pay a dividend. If you want a quality shareholder base you need to pay a reliable dividend. The share buybacks will likely be opportunistic. And with their shares trading below TBV, it is a no brainer to buy back stock - and like Fairfax with their buybacks, to be very piggish about it (buy back as much as you can). I would love to see Eurobank pull a Stelco and vacuum up a massive amount of stock while their stock is trading at such a cheap valuation. This would materially increase Fairfax’s ownership position which would be amazing. Eurobank also wants to grow. Looking at their past decisions, they will be very strategic and opportunistic with acquisitions. Eurobank really is a wonderful set up for an investor. A best in class management team. And an overcapitalized and very profitable bank. With lots of good options. All an investor has to do is get a drink… go to the porch and sit in their rocker… relax… and enjoy the view. And let time and compounding works its magic. Edited November 28 by Viking
nwoodman Posted November 28 Posted November 28 (edited) Atlas has reported https://www.sec.gov/edgar/browse/?CIK=0001794846 Quick Summary Financial Performance: Revenue Q3 2024: $601.4M (up 34.7% from Q3 2023) Year-to-date: $1,676.5M (up 35.4% from 2023) Growth primarily driven by delivery of 41 newbuild vessels since September 2023 Operating Results Operating earnings: $334.6M in Q3 2024 (up from $218.5M) Net earnings: $130.6M in Q3 2024 (down from $142.9M) Operating expenses increased to $107.6M (up 15.9%) Vessel utilization improved to 98.6% Cash Flow & Liquidity Operating cash flow: $400.1M in Q3 (up from $189.5M) Total liquidity: $1.25B Cash: $549.4M Undrawn credit: $700.0M Total borrowings: $10.39B Weighted average interest rate: 6.66% Fleet Operations: Current Fleet 182 operating vessels Total capacity: 1,873,880 TEU Average vessel age: 7 years Fleet utilization: 98.6% Vessel Development 36 vessels under construction 6 newbuilds delivered in Q3 3 additional deliveries in October/November New orders for six 13,000 TEU and six 13,600 TEU vessels Strategic Developments: Formed ONESEA Solutions joint venture with ONE Entered sale-leaseback financing for multiple vessels Significant vessel order activity with both owned and novated contracts Dividends: Q3 dividends: $52.0M (down from $208.0M in Q3 2023) Year-to-date dividends: $156.0M (down from $274.0M) Balance Sheet Position: Total assets: $15.69B (up from $13.07B end of 2023) Shareholders' equity: $4.56B Total borrowings-to-asset ratio: 66.2% Future Outlook: Strong contracted revenue stream with $23.5B in gross contracted cash flows Continued fleet expansion through newbuild program Focus on maintaining high utilization rates and operational efficiency Strategic emphasis on long-term contracted cash flows and fleet modernization Ongoing capital investment in fleet maintenance and expansion Edited November 28 by nwoodman
dartmonkey Posted November 29 Posted November 29 5 hours ago, Viking said: I would love to see Eurobank pull a Stelco and vacuum up a massive amount of stock while their stock is trading at such a cheap valuation. This would materially increase Fairfax’s ownership position which would be amazing. Is Fairfax restricted from buying more? The price has gone up nicely, but not spectacularly; €2 now, and they were in a range between €0.50-1.00 seven or eight years ago, when they looked like they might not survive. between ). With earnings steady at about €0.36, they are at about 6 times earnings. Fairfax only owns 32.9%, couldn't they go a little higher, or do they have a standstill agreement with Eurobank or with the Greek regulators?
nwoodman Posted November 29 Posted November 29 (edited) This filing from 2021 (which may well be out of date) shows the reconciliation. It differentiates Fairfax Finacial’s position in Eurobank when including the Hellenic Financial Stability Fund (33%) and excluding HFSF (34.7%). https://www.eurobankholdings.gr/en/grafeio-tupou/etairiki-anakoinosi-20-07-21?utm_source=chatgpt.com “The HFSF holds shares in Greek banks as part of its mandate to stabilize the financial sector following the Greek financial crisis. However, it does not operate as a typical shareholder: • Voting Rights: The HFSF often holds restricted or limited voting rights. In some cases, it abstains from regular shareholder votes unless explicitly required to act in its supervisory role. • Non-Commercial Ownership: Unlike private shareholders (e.g., Fairfax), the HFSF’s primary goal is to ensure financial stability rather than profit or exert influence for strategic or operational decisions.” Edited November 29 by nwoodman
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