Fairfax 2025

[Parsad]

1 hour ago, This2ShallPass said:

@Viking no definitely people make mistakes and all of us should get second chance. I'm just pointing out the recurring pattern. I remember Atlas used to be discussed a lot in these boards and many members bought into it, waited patiently but right at the bottom FF took it away from them.

 

I think if you own anything Fairfax owns, you should be aware or understand that his priority is first to Fairfax shareholders...then to the party being acquired. 

 

He's going to be fair in the dealings...no activist stance, no proxy fight, no hostile takeover...but he's also not going to offer anything. 

 

He's looking for something that will hit his ROI target as a Fairfax investment, not what will hit the ROI target for the target company's shareholders.  They are also going be opportunistic...crisis or economic turmoil happens, he buys stuff cheap. 

 

So the Fair and Friendly motto is primarily for Fairfax and their dealings...but doesn't mean he's going to necessarily make the best offer.  Cheers! 

[petec]

11 hours ago, This2ShallPass said:

@Viking no definitely people make mistakes and all of us should get second chance. I'm just pointing out the recurring pattern. I remember Atlas used to be discussed a lot in these boards and many members bought into it, waited patiently but right at the bottom FF took it away from them.

What? I was buying Seaspan between $6.50 and $8. They bought it off me at $15.50. They did not buy it right at the bottom. 
 

Seems to me that the only way Prem could meet the fair and friendly description in the eyes of some on this board is to take companies private at fair value. Is that *really* how we’d expect or want him to behave, as FFH shareholders. 
 

Separately, I don’t think this deal changes their access to private credit. They already have that through investing in KW funds, which I expect they will continue to do when KW is private. 
 

What they’re buying is 1) cheap real estate as the cycle turns (NOI catching up to higher interest costs, and low supply) and 2) a growing fee stream from 3rd party capital.

 

Also: McMorrow is 78. Interesting to see what happens when he retires. FFH now control succession. 

 

 

[petec]

15 hours ago, TwoCitiesCapital said:

 

I hope they offer more than a 30% premium for that one

Amen. 

[Hektor]

10 hours ago, Parsad said:

He's going to be fair in the dealings...no activist stance, no proxy fight, no hostile takeover...but he's also not going to offer anything. 

+1

11 hours ago, SafetyinNumbers said:

Fair and Friendly means it’s not hostile and minority shareholders get to vote. A majority of the minority is required. It also means when they make an offer they don’t drop the price later. It doesn’t mean the price is fair value. They want to buy at a discount. That’s what it’s all about. 

+1

[Hektor]

10 hours ago, Parsad said:

He's watching when you are good...he's watching when you are bad...just like Santa Claus!  Cheers!

And he lives in the north 

[73 Reds]

58 minutes ago, petec said:

What? I was buying Seaspan between $6.50 and $8. They bought it off me at $15.50. They did not buy it right at the bottom. 
 

Seems to me that the only way Prem could meet the fair and friendly description in the eyes of some on this board is to take companies private at fair value. Is that *really* how we’d expect or want him to behave, as FFH shareholders. 
 

Separately, I don’t think this deal changes their access to private credit. They already have that through investing in KW funds, which I expect they will continue to do when KW is private. 
 

What they’re buying is 1) cheap real estate as the cycle turns (NOI catching up to higher interest costs, and low supply) and 2) a growing fee stream from 3rd party capital.

le.  

Also: McMorrow is 78. Interesting to see what happens when he retires. FFH now control succession. 

 

 

As a Fairfax shareholder I want them to acquire assets at the best (i.e., cheapest) price and terms possible.  What does fair and friendly have to do with anything?

[Daphne]

Fair and friendly has to do with brand and reputation. It’s what brings good deals to the doorstep.

[73 Reds]

6 minutes ago, Daphne said:

Fair and friendly has to do with brand and reputation. It’s what brings good deals to the doorstep.

But not at the expense of existing shareholders.  Never pay more than necessary.  In fact, in a case like KW where curent management's days may be numbered, there is no reason to redistribute wealth in the name of fair and friendly. 

[Daphne]

What you fail to see is that cheapness is not the only measure of value. Prem plays three dimensional chess and you’re limiting yourself to one.

[73 Reds]

"Fair" and "Friendly" are both entirely subjective.  The fiduciary duty owed by a public company to its shareholders is not.  Sorry to have ruffled your feathers. 

Edited November 6, 2025 by 73 Reds
spelling

[SafetyinNumbers]

3 hours ago, petec said:

What? I was buying Seaspan between $6.50 and $8. They bought it off me at $15.50. They did not buy it right at the bottom. 
 

Seems to me that the only way Prem could meet the fair and friendly description in the eyes of some on this board is to take companies private at fair value. Is that *really* how we’d expect or want him to behave, as FFH shareholders. 
 

Separately, I don’t think this deal changes their access to private credit. They already have that through investing in KW funds, which I expect they will continue to do when KW is private. 
 

What they’re buying is 1) cheap real estate as the cycle turns (NOI catching up to higher interest costs, and low supply) and 2) a growing fee stream from 3rd party capital.

 

Also: McMorrow is 78. Interesting to see what happens when he retires. FFH now control succession. 

 

 

Also long duration assets with inflation protection for those concerned about the short duration of the bond portfolio, this is a significant offset along with the other equities in the portfolio. 

[thowed]

@73 Reds @Daphne I think you guys are getting in a twist - you're less far away from each other than you think.

 

Of course FFH wants to get a good deal.

 

However, if you want people to come to you with future deals, you want to have a respectable reputation compared with the competition. 

 

So I think Daphne's saying just don't screw that last penny from them, as word will spread & people won't come to you in future.

 

Otherwise of course you're playing to get the best deal you can

[Munger_Disciple]

Prem does & will do what's best for FFH shareholders. That means pay as low a price as possible for any acquisition which allows FFH to get the highest possible IRR. If the seller has better alternatives, he should take the other deal. Fair doesn't mean Fairfax pays full price. That's ridiculous.

Edited November 6, 2025 by Munger_Disciple

[73 Reds]

49 minutes ago, Munger_Disciple said:

Prem does & will do what's best for FFH shareholders. That means pay as low a price as possible for any acquisition which allows FFH to get the highest possible IRR. If the seller has better alternatives, he should take the other deal. Fair doesn't mean Fairfax pays full price. That's ridiculous.

Yup.  Fair and friendly are terms reserved for your partners in a business sense, not potential acqiuisition candidiates.  By definition, the interests of buyer and seller are divergent when management of the acquired company does not stay on.  I want Fairfax, as buyer, to be ruthless in negotiating an acquisition, not fair and friendly to anyone but Fairfax shareholders.  

[SafetyinNumbers]

5 minutes ago, 73 Reds said:

Yup.  Fair and friendly are terms reserved for your partners in a business sense, not potential acqiuisition candidiates.  By definition, the interests of buyer and seller are divergent when management of the acquired company does not stay on.  I want Fairfax, as buyer, to be ruthless in negotiating an acquisition, not fair and friendly to anyone but Fairfax shareholders.  

They seem to act more like Berkshire and say this is our price, take it or leave it and no hard feelings if they leave it. In insider bid scenarios a bump is sometimes necessary to get minority holders over the line.

[dartmonkey]

15 hours ago, This2ShallPass said:

no definitely people make mistakes and all of us should get second chance. I'm just pointing out the recurring pattern. I remember Atlas used to be discussed a lot in these boards and many members bought into it, waited patiently but right at the bottom FF took it away from them.

I am frankly amazed that people think that Fairfax's 'fair and friendly' doctrine would also involve protecting shareholders because they have followed Fairfax into an investment or are members of these boards. In any minority investment, you can have your shares taken away by someone who swoops in and takes it away from them at a good price, and it is neither a moral failing of Watsa nor a contradiction of his fair and friendly approach that he looks out for his shareholders' interests and offers to buy something a good price, even if not everyone wanted to sell it at that price.

 

As for Fairfax India, I don't think the same is true. Watsa DOES have a fiduciary responsibility to protect FIH shareholders, different from his lack of responsibility towards shareholders of Fibrek, Atlas or Kennedy Wilson. FIH is an investment vehicle set up by Fairfax with a controlling stake held by Fairfax from the start. Fairfax is involved in managing the company and communicating with shareholders about its value, and supporting that value by repurchasing shares. I think it is obvious that it would not be fair for Fairfax to take investors assets at $10 a share and to then turn around and take them out at $6 a share because Mr Market is not seeing the value. In addition, who would ever invest in a future Fairfax investment vehicle if they behaved that way? Whereas this concern does not exist for external companies like Fibrek/Atlas/KW. Perhaps Watsa has never explicitly promised to never take FIH private, but I bet he would answer this way (has this question ever been directly asked of him?), and I think the fact that he has not taken FIH at even lower prices than today (like the sub-$10 price 3. years ago) is some confirmation that he has no intention of doing so.

[73 Reds]

7 minutes ago, dartmonkey said:

I am frankly amazed that people think that Fairfax's 'fair and friendly' doctrine would also involve protecting shareholders because they have followed Fairfax into an investment or are members of these boards. In any minority investment, you can have your shares taken away by someone who swoops in and takes it away from them at a good price, and it is neither a moral failing of Watsa nor a contradiction of his fair and friendly approach that he looks out for his shareholders' interests and offers to buy something a good price, even if not everyone wanted to sell it at that price.

 

As for Fairfax India, I don't think the same is true. Watsa DOES have a fiduciary responsibility to protect FIH shareholders, different from his lack of responsibility towards shareholders of Fibrek, Atlas or Kennedy Wilson. FIH is an investment vehicle set up by Fairfax with a controlling stake held by Fairfax from the start. Fairfax is involved in managing the company and communicating with shareholders about its value, and supporting that value by repurchasing shares. I think it is obvious that it would not be fair for Fairfax to take investors assets at $10 a share and to then turn around and take them out at $6 a share because Mr Market is not seeing the value. In addition, who would ever invest in a future Fairfax investment vehicle if they behaved that way? Whereas this concern does not exist for external companies like Fibrek/Atlas/KW. Perhaps Watsa has never explicitly promised to never take FIH private, but I bet he would answer this way (has this question ever been directly asked of him?), and I think the fact that he has not taken FIH at even lower prices than today (like the sub-$10 price 3. years ago) is some confirmation that he has no intention ofdoing so.

Yeah, Fairfax Financial and Fairfax India is very much akin to a partnership.  You don't take advantage of your partners.

[Santayana]

6 hours ago, petec said:

What? I was buying Seaspan between $6.50 and $8. They bought it off me at $15.50. They did not buy it right at the bottom. 

Didn't they pay $21 for ATCO?

[gfp]

2 minutes ago, Santayana said:

Didn't they pay $21 for ATCO?

 

$15.50

 

https://ir.atlascorporation.com/2022-11-01-Atlas-Corp-to-be-Acquired-by-Poseidon-Acquisition-Corp-for-15-50-in-Cash-Per-Share?utm_source=chatgpt.com

 

bumped from the initial 14.45

https://ir.atlascorporation.com/2022-08-04-Atlas-Corp-Announces-Receipt-of-Take-Private-Proposal?utm_source=chatgpt.com

Edited November 6, 2025 by gfp

[Santayana]

Clearly I was thinking of some other deal.  Still @petecis correct that it wasn't at the bottom.

[gfp]

7 minutes ago, Santayana said:

Clearly I was thinking of some other deal.  Still @petecis correct that it wasn't at the bottom.

 

Maybe you were a Recipe shareholder - that one was CAD but pretty close to 21

[SafetyinNumbers]

1 hour ago, Santayana said:

Clearly I was thinking of some other deal.  Still @petecis correct that it wasn't at the bottom.

Also, FFH didn’t put up any new capital. They just rolled their shares in. 

[This2ShallPass]

8 hours ago, petec said:

What? I was buying Seaspan between $6.50 and $8. They bought it off me at $15.50. They did not buy it right at the bottom. 
 

Seems to me that the only way Prem could meet the fair and friendly description in the eyes of some on this board is to take companies private at fair value. Is that *really* how we’d expect or want him to behave, as FFH shareholders. 
 

Here is a post by a Atlas shareholder at the bottom (bolded by me). He makes the points more eloquently. I did not own Atlas, but remember there was widespread dissatisfaction in these boards from shareholders and even disbelief on the take under. 

A lot of support here for how Prem does things. But, taking money from other people (minority shareholders) when you need it, a good portion of those people buy into these companies in large part because they TRUST you and then at an inopportune time buy it back at a low price is NOT Fair and Friendly.

I'm ok saying that's business, suck it up. My only point of contention is don't have it as your motto, it's like the used car dealer advertising "Best deal in Town".

 

Lesson is buy Fairfax for 100% alignment w Prem. I bought more today.

https://thecobf.com/forum/topic/20517-fairfax-2024/page/67/#comment-573144

 

"One of the ways that you can get a sense of "fairness" is to invert the situation.  Would Prem have allowed his ORH position to be sold for that price?  Not even close.

 

Same deal for the Atlas takeout.  None of the principal owners (FFH, Washington, Sokol, etc) would have accepted the price that minority shareholders received.

 

Okay, that's business and that's life.  But, these types of events do put a tarnish on the "fast and friendly" image that Prem has tried to cultivate over the decades. "

 

 

 

[LC]

https://www.fairfax.ca/wp-content/uploads/2025/11/FFH-2025-Q3-Interim-Report-Final.pdf

 

Reported EPS of $55.90 (vs consensus estimate ~43.xx: where is @Brett Horn?)

@Viking I think you called it - good analysis 

 

Looks like they repurchased 285,144 shares in Q3, and another 107,525 shares post-Sept30.

Edited November 6, 2025 by LC

[Hoodlum]

11 minutes ago, LC said:

https://www.fairfax.ca/wp-content/uploads/2025/11/FFH-2025-Q3-Interim-Report-Final.pdf

 

Reported EPS of $55.90
@Viking I think you called it - good analysis 

 

That was a little bit higher than I expected, but not surprised.  I don't see the details yet but it sounds like CR came under the 93.3 CR from the prior Q2, in order to get to $55.90 EPS.

 

Edited November 6, 2025 by Hoodlum