Fairfax stock positions

[Txvestor]

https://finance.yahoo.com/markets/stocks/articles/andrew-peller-enters-definitive-agreement-110000838.html
 

So Fairfax is buying a Winemaker Andrew Peller at an enterprise value of about 8x EBITDA. About $65M of Fairfax equity being issued for the controlling stakeholders. I assume the rest is in cash. 

May have some synergies with Recipe? 
 

I sure hope this is a better deal than buying back Fairfax shares. I think at the current prices everything needs to be evaluated from that lens. 

[SafetyinNumbers]

14 minutes ago, Txvestor said:

sure hope this is a better deal than buying back Fairfax shares. I think at the current prices everything needs to be evaluated from that lens. 

I continue to think this is a false choice. Equity investments at the insurance subsidiaries level shouldn’t have direct impact on capital allocation decisions at the holdco. They have $4b to dividend up to the holdco from the subsidiaries. My guess is they do half. They also have $400m of Poseidon at the holdco which I assume was also sold. Plus Eurolife proceeds and the 30-year debt raise means the holdco is well capitalized for buybacks even after buying out the Allied World minority interest. 

[SafetyinNumbers]

Eurobank got busy on the buyback again post dividend payout last week.

 

 

[gfp]

27 minutes ago, Txvestor said:

 

https://finance.yahoo.com/markets/stocks/articles/andrew-peller-enters-definitive-agreement-110000838.html
 

So Fairfax is buying a Winemaker Andrew Peller at an enterprise value of about 8x EBITDA. About $65M of Fairfax equity being issued for the controlling stakeholders. I assume the rest is in cash. 

May have some synergies with Recipe? 
 

I sure hope this is a better deal than buying back Fairfax shares. I think at the current prices everything needs to be evaluated from that lens. 

 

Is that right that they are issuing Fairfax stock to the controlling stakeholders?  I didn't see that part.  I read all cash deal.

 

edit:  Oh I see you are probably referencing the equity in the private winemaker the sellers are retaining.  Not the same thing as getting or issuing Fairfax shares

Edited 3 hours ago by gfp

[LC]

29 minutes ago, SafetyinNumbers said:

I continue to think this is a false choice. Equity investments at the insurance subsidiaries level shouldn’t have direct impact on capital allocation decisions at the holdco. They have $4b to dividend up to the holdco from the subsidiaries. My guess is they do half.

 

I don't understand the reasoning here. 

 

Take this Peller deal, if the deal never materialized, wouldn't the insurance subs now have $4b + $400MM to dividend up to holdco? 

[SafetyinNumbers]

39 minutes ago, LC said:

 

I don't understand the reasoning here. 

 

Take this Peller deal, if the deal never materialized, wouldn't the insurance subs now have $4b + $400MM to dividend up to holdco? 

I don’t think so. The dividend capacity is based on what regulators will allow them to dividend out without seeking additional approvals based on excess capital. Selling one equity investment like Poseidon to buy ADW doesn’t change that. 

[Hoodlum]

1 hour ago, gfp said:

 

Is that right that they are issuing Fairfax stock to the controlling stakeholders?  I didn't see that part.  I read all cash deal.

 

edit:  Oh I see you are probably referencing the equity in the private winemaker the sellers are retaining.  Not the same thing as getting or issuing Fairfax shares

maybe I am not reading it correctly but it sounds like John Peller is exchanging his shares for the “purchaser’s” shares.  Wouldn’t that be Fairfax shares?

 

https://ir.andrewpeller.com/news/news-details/2026/Andrew-Peller-Enters-into-Definitive-Agreement-to-be-Acquired-by-Fairfax/default.aspx

 

In connection with the Transaction, John Peller and certain affiliates (collectively, the “Rollover Shareholders”) have entered into an equity rollover agreement with the Purchaser, pursuant to which they have agreed to exchange all 5,246,517 Class A Shares and 1,994,212 Class B Shares beneficially owned and controlled by the Rollover Shareholders (the "Rollover Shares") for shares in the capital of the Purchaser or an affiliate thereof. The Rollover Shares represent approximately 15% of the issued and outstanding Class A Shares and approximately 25% of the issued and outstanding Class B Shares

[SafetyinNumbers]

Just now, Hoodlum said:

maybe I am not reading it correctly but it sounds like John Peller is exchanging his shares for the “purchaser’s” shares.  Wouldn’t that be Fairfax shares?

 

https://ir.andrewpeller.com/news/news-details/2026/Andrew-Peller-Enters-into-Definitive-Agreement-to-be-Acquired-by-Fairfax/default.aspx

 

In connection with the Transaction, John Peller and certain affiliates (collectively, the “Rollover Shareholders”) have entered into an equity rollover agreement with the Purchaser, pursuant to which they have agreed to exchange all 5,246,517 Class A Shares and 1,994,212 Class B Shares beneficially owned and controlled by the Rollover Shareholders (the "Rollover Shares") for shares in the capital of the Purchaser or an affiliate thereof. The Rollover Shares represent approximately 15% of the issued and outstanding Class A Shares and approximately 25% of the issued and outstanding Class B Shares

No, the purchaser is a new subsidiary that has been created to acquire the company.

[Txvestor]

1 hour ago, SafetyinNumbers said:

Eurobank got busy on the buyback again post dividend payout last week.

 

 

With all due respect, those are really miniscule numbers given their market cap in the range of $15B. €6.5M is less than 0.05% over 3mths. 

[Txvestor]

4 minutes ago, Hoodlum said:

maybe I am not reading it correctly but it sounds like John Peller is exchanging his shares for the “purchaser’s” shares.  Wouldn’t that be Fairfax shares?

 

https://ir.andrewpeller.com/news/news-details/2026/Andrew-Peller-Enters-into-Definitive-Agreement-to-be-Acquired-by-Fairfax/default.aspx

 

In connection with the Transaction, John Peller and certain affiliates (collectively, the “Rollover Shareholders”) have entered into an equity rollover agreement with the Purchaser, pursuant to which they have agreed to exchange all 5,246,517 Class A Shares and 1,994,212 Class B Shares beneficially owned and controlled by the Rollover Shareholders (the "Rollover Shares") for shares in the capital of the Purchaser or an affiliate thereof. The Rollover Shares represent approximately 15% of the issued and outstanding Class A Shares and approximately 25% of the issued and outstanding Class B Shares

Yes thats what I read it to be. And how I arrived  at ~$65M. Ie 5.2M x $8 and 2M x $12. Everyone else gets cash. 

[SafetyinNumbers]

Just now, jbwent63 said:

That was going to be my point. They will own a minority stake in the company directly, not via shares of FFH. this allows the shareholders to defer the capital gain they would otherwise have to recognize on the disposition of their Peller shares.

Also gives Fairfax partners who know the company best that have skin in the game. 

[Txvestor]

9 minutes ago, SafetyinNumbers said:

No, the purchaser is a new subsidiary that has been created to acquire the company.

Yes looks like you're right here. The Andrew Peller release is more clear on this. And I agree it's a good thing as the managers have skin in the game. 
 

"Andrew Peller Limited (“Andrew Peller” or the “Company”) (ADW.A / ADW.B) announced today that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with a newly-formed and wholly-owned subsidiary (the “Purchaser”) of Fairfax Financial Holdings Limited (“Fairfax”), and Fairfax, as guarantor, in respect of a transaction (the “Transaction”) whereby the Purchaser will acquire all of the issued and outstanding Class A Non-Voting shares (the “Class A Shares”) and Class B Voting shares (the “Class B Shares”) of the Company (other than the Rollover Shares (as defined below))"

 

[mananainvesting]

Andrew Peller owns a good property that they have been wanting to develop to sell.
 

Edited 57 minutes ago by mananainvesting

[mananainvesting]

[Viking]

Here is the link to a good overview of Peller Estates. 

 

https://s201.q4cdn.com/211846765/files/doc_presentations/2026/APL-Investor-Presentation-Q3-26-FINAL.pdf

 

The reported purchase price can be misleading... Part of the purchase price will likely be funded with an increase in debt at Peller Estates. 

 

The key is how much $ is Fairfax contributing. And what will that investment earn over time? 

 

The big question for me is: How good is the management team at Peller Estates?

 

There are lots of interesting angles to this deal: 

• Real estate portfolio and inventory = C$500M 
• Recipe/Keg - this will work both ways... restaurant competitors might not like it.
• This is a long term business - much better fit as a private company.
• The sector (alcohol) is pretty out of favour. 

From an income stream perspective, another addition to the consolidated bucket for Fairfax.

Edited 21 minutes ago by Viking