Montville Capital

@MrMojoRisinX Do you think a BLD holder who doesn’t want to own QXO will get closer to $505 or best just to take the money now and sell in the market? Seems like a bit of a gamble on QXO, basically just own a derivative of it now

$QXO / TopBuild $BLD: Let's Break a Deal $17 billion. 23% premium. A two-step merger structured as a tax-free reorganization. Brad Jacobs making his biggest move yet in building products after telegraphing this playbook for over a year. On the surface this looks like a clean, high-conviction strategic deal...but let's stress the transaction anyway! Deal Structure BLD holders elect cash ($505/share) or stock (20.2 QXO shares, implying $505 at Friday's close). Cash is capped at 45% of aggregate consideration. Stock floor is 55%, but here is a nuance worth sitting with: QXO may, in its sole discretion, increase the maximum stock component if shareholders over-elect into QXO paper. That is one-way optionality sitting entirely with the acquirer. If QXO trades up meaningfully during the deal timeline, more BLD holders will want cash, QXO will be fine letting them take stock instead, and the cash outlay shrinks. The deal is a Titanium Merger (MergerSub into BLD, BLD survives) immediately followed by a Forward Merger (BLD into a Delaware LLC wholly owned by QXO). The double-step achieves §368(a) reorganization treatment. That is why there is a hard closing condition requiring a Jones Day tax opinion confirming the integrated transaction qualifies under Rev. Rul. 2001-46. The Tell January 17, 2027 outside date. No extension language. Companies guiding Q3 close. That gap is not a warning sign. It is a confidence signal. Brad almost certainly did pre-notification work with regulators before signing. He got enough comfort to guide pre-Labor Day without hedging. The lawyers built January 2027 as a clean buffer not because antitrust is scary but because that is how you paper a $17 billion deal when you know the other side has a sophisticated legal team scrutinizing every provision. Proxy within 30 business days of signing. HSR filed within 10 business days. Both shareholder meetings 21 business days after mailing the definitive proxy. Antitrust Assessment Largely noise. QXO is roofing, waterproofing, and lumber. BLD is insulation installation and specialty distribution. Genuinely complementary with limited direct overlap. Home Depot/SRS closed. GMS/Saint-Gobain closed. Lowe's/FBM closed. The current administration is not looking to make a name blocking building products consolidation. Straightforward HSR review, possibly a pull and refile if staff has questions, clearance well before Labor Day. The tell is in the agreement itself. The divestiture threshold is defined as material to the business measured against a hypothetical company the size of TopBuild standalone, not the combined entity. That is a high bar written by lawyers who do not expect to get anywhere near it. QXO is also locked out of additional acquisitions until the earlier of HSR clearance or May 29, 2026, which reads as a clean hands commitment to keep the review simple. Tails The tail scenario worth flagging is behavioral remedies rather than structural divestitures. If the FTC asks for information sharing firewalls or supply agreement restrictions touching shared suppliers like Owens Corning or Saint-Gobain, those do not look like divestitures on the surface but they could functionally impair the synergy thesis without triggering a formal walk right. Not a gotcha. A pressure point. And there is a $600M toll booth between Brad and any exit regardless of how the regulatory conversation goes. Votes BLD is straightforward. 23% premium, unanimous board, Goldman and RBC fairness opinions in hand, no obvious blocking position. The QXO vote looks more interesting until you read the actual voting agreement. Brad's vehicle, Jacobs Private Equity II, entered into a hard voting commitment on April 18, 2026 covering all QXO shares and Convertible Perpetual Preferred Stock. JPE controls approximately 22% of actual current voting power and roughly 39% on a fully diluted as-converted basis assuming warrant exercise. More importantly the voting agreement terminates only in three circumstances: the Forward Merger closes, the merger agreement terminates in accordance with its terms, or the QXO stockholder approval has already been obtained. No fiduciary out for JPE. No price protection trigger. No stock price floor that releases the commitment. The only way JPE gets released from its voting obligation is if the merger agreement itself terminates first, which requires pulling a termination trigger under Article VI and writing a $600M check to BLD. To free the vote Brad has to blow up the deal first. The TopBuild lawyers know exactly who Brad is. Reflexive Loop This is the dynamic that does not show up on day one but matters as the deal ages. QXO stock slides. Implied deal value to BLD holders erodes. BLD stock gets dragged down with it. By the time the proxy is mailed, BLD may be trading at or near the implied consideration value rather than through it. Now the background section of the proxy becomes a weapon. If it reveals other bidders at higher prices or with higher cash components, and BLD stock has drifted toward those levels, you have handed activists and plaintiff lawyers a clean narrative. The fairness opinion is anchored to Friday's close. The world may look different in June. The two votes are not independent events. They are correlated through the QXO stock price. How Clever is Brad vs How Good are BLD's Lawyers This is the most interesting intellectual exercise in the whole deal. Let's walk every standard acquirer escape route and show what the Jones Day team did to each one. Financing out. Gone. No financing condition in the agreement. Committed debt letter from Morgan Stanley, Barclays, and Wells Fargo dated April 15, 2026. Brad explicitly acknowledged in the agreement that obtaining financing is not a condition to closing. MAC claim. Nearly impossible. Delaware courts post-IBP and Akorn have set an extraordinarily high bar requiring a durationally significant, company-specific impairment. A bad quarter, a tariff headwind, a housing slowdown, none of that clears the threshold. Worth noting the MAC carve-outs explicitly exclude tariffs, anti-dumping duties, and trade wars unless they have a disproportionate effect on BLD relative to peers. A severe targeted tariff shock on insulation inputs that demonstrably hits BLD harder than the broader building products universe is theoretically arguable, and that carve-out exception is where the language gets interesting if you are a lawyer looking for connective tissue between a deteriorating macro and a plausible exit argument. Regulatory out. Requires actually being blocked by regulators, not just delayed. Given complementary businesses and pre-notification work Brad almost certainly completed, not a realistic escape. The $600M regulatory failure fee is only triggered under specific enumerated conditions. The behavioral remedy scenario is the closest thing to a usable seam here and it still requires a specific set of facts to align. Reps and warranties breach. BLD's reps are heavily qualified by materiality and Company Material Adverse Effect thresholds throughout Section 3.1. Finding something in diligence that rises to rep breach sufficient to terminate under Section 5.2(a)(ii) is genuinely hard. The reps were written to survive scrutiny. Ordinary course covenant breach. BLD runs the business in ordinary course between signing and closing per Section 4.1. Threshold is material, cure period is 30 days, and BLD gets warned before the trigger is pulled. Vote engineering. Cannot manufacture a QXO vote failure because JPE is locked in by the voting agreement which only dissolves if the merger agreement terminates first. Circular trap. Parent Adverse Recommendation Change. The one seam that technically remains open. The QXO board can withdraw its recommendation in response to a Parent Intervening Event under Section 4.4(i)(ii) with a 4-business-day notice and match period. But Parent Intervening Event is narrowly defined as something not known or reasonably foreseeable at signing. This is not the right to walk, Brad, but it does give you an angle to potentially attempt to renegotiate. Outside date. January 2027 with no extension. If Brad's own failure to fulfill obligations caused the timeline miss, he loses the termination right entirely under Section 6.2(a). Perhaps the only genuine gotcha the lawyers left in the docs, and it is lower probability than a tail risk, is the diligence surprise. Something in the closing process that rises to a rep breach or MAC level that nobody anticipated at signing. Gotcha Gamma: $600M Cost Here is the honest bottom line on Brad Jacobs and this deal. He is one of the best capital allocators alive. Relentlessly analytical about accretion and dilution at every price point and over every duration. If QXO stock deteriorates enough that the deal math flips from accretive to destructive, he will look for every contractual seam available to him. He found most of them closed. The escape hatch that technically remains is the behavioral remedy scenario: a regulatory ask annoying enough to impair synergies, not clean enough to constitute a formal walk right, and uncomfortable enough that Brad starts making phone calls about price. That is the renegotiation play. Brad aint paying $600M unless he finds something genuinely disqualifying in the closing process. He is too disciplined and too proud to write that check as a retreat. The TopBuild lawyers did not just protect the deal. They protected it specifically against Brad, closing every standard acquirer escape route with surgical precision, tying the voting agreement termination directly to the merger agreement termination so he cannot even sequence his way out cheaply, and leaving him with one rational choice: close the deal he signed his name to. The best protection BLD shareholders have is not the premium. Def NOT the fairness opinion. Not antitrust approval. In Summary, the protection is that Brad Jacobs is too cheap and too proud to pay $600M to walk away from a deal he signed his name to. The Jones Day team knew exactly who was sitting across the table and they papered accordingly. Mojo

@t0rpack Not sure about Alken after the Wirecard debacle

Les meilleurs fonds small/mid cap éligibles au PEA : -Alken Small Cap Europe (LU0300834669) -Indépendance AM Europe Small (LU1832175001) Une performance annualisée de 19,64% et 15,31% sur les 5 dernières années.

@rhomboid1MF The buyers of Hargreaves Lansdown did similar, although they had a 1% minimum not 66%, seems designed to put off retail, and they didn't have the complicated PIK structure.

#ANCR can’t recall seeing anything quite like this before londonstockexchange.com/news-article/A… ..but

@CrystalAmberRB1 Nothing untoward there then

Radio silence at BOOM Audioboom, the £100m market cap podcast publisher has been in a takeover offer period for more than six months. In the last 90 minutes, its share price has surged 15%, yet to date, there has been no announcement from the company or a potential bidder. The shares have been bought aggressively this afternoon. It's surprising that there's radio silence.

@hcapinvesting @Uzocapital They'll tell you they are investors who think about the long-term at the same time too...

@Uzocapital True and I agree that charging is short sighted. Would think getting your name out there would increase marketing and consequently AUM

why do fund managers, with substacks put their work behind a paywall? surely thats counter productive if growing assets / finding LPs is more important than the subscription revenue? Feels short sighted to me…what am i missing?

@taobanker @ColubeatID They've been going pretty hard at the first allowance. Be interesting to see how quickly they can do it, over 8% of non-family shares in the new EUR 300m.

@ColubeatID I'm just praying that they really buy back those shares

Thank you for this excellent research on $BZU.MI earnings

@jeuasommenulle April Fool?

Wow.

@SowingAlphaSeed @awealthofcs Don’t forget Barry’s podcast on where a guest will make a really interesting statement that should lead to a follow up question but all they get is “interesting, anyway <completely different topic>”. Did it to an old boss and I wanted to throw things listening to it

The Ritholtz wealth guys are an example of where I really fell hard for a schtick and respected them a lot when I first started diving into finance only for the respect to completely degrade over time. The final straw was @awealthofcs tweeting something patently false and just completely ignoring my reply pointing out his mistake. Completely disingenuous for someone who builds an identity around financial education.

@MallardResearch @IggyOnInvesting That was why we sold. Spoke to them after the TU in Dec and they were shocked that we had observed at the local shop that upping the prices had caused a visible decline in custom. Had gone from being bargain basement, which was their USP, to almost the same as everywhere else.

@MontvilleCap @IggyOnInvesting Honestly, I just dont think they are the buyback type unfortunately. When it comes to capital allocation, none of their explanations sound genuine to me.

$CARD factory had been for sure the most frustrating stock I’ve ever owned. Bought slightly below where the stock now trades furring lockdown. It triple from there and is now back down to Covid level prices…. Crazy.

@MallardResearch @IggyOnInvesting It’s been this cheap for months and management haven’t bought any shares since they finished paying to offset their SBC. If they’re confident they should be hammering the buybacks, which begs the question… why not.

@IggyOnInvesting I really hope things change from here. Even with declining sales this is quite cheap if management buy stock hand over fist.

@LeftskewedIM What caused the jump in 2024?

Leftskewed Investment Management is up over 40% YTD, unleveled. This follows a great 2025. We are looking to open new accounts for Accredited, Foreign, and Institutional clients. We have no lock up periods, assets remain in Your Name, and total transparency is provided. Please DM or email billy.lobue@leftskewed.com with any questions, or to onboard.

@SolutionOrganic @taobanker They’re into generating performance and not reading Nietzsche and marketing 😂

@taobanker I don't understand why the media like Bloomberg gives people like him who underperform so much attention. There are other investors with better performance and more commitment to their craft that we could be learning more from and have more interesting articles written about

You have to be an unfathomably massive asshole to write that in letters to LPs as you underperform On the flipside, you have to be an unfathomably massive retard to hire Guy Spier as your GP

@GodsgreatG Are there any serious competitors to Gaztransport & Technigaz?

This is the inside of an LNG cargo tank on a modern LNG carrier. It may look like a metallic maze, but every layer is carefully engineered to safely contain gas at -162°C. Most modern LNG ships use the Gaztransport & Technigaz membrane system, where the tank is built directly into the ship’s hull using a layered containment system rather than separate spherical tanks. In the heart of this system is the primary containment. This is the layer that directly holds the LNG. It is made from thin corrugated materials such as stainless steel or Invar (a nickel-steel alloy). The corrugated design is critical because it allows the material to expand and contract under extreme cold without cracking or failing. It’s a cryogenic material because LNG is extremely cold. Behind this sits the insulation system, which is what is most visible in the image. These are prefabricated insulation boxes made from materials like reinforced polyurethane foam or perlite-filled panels. Their role is to minimize heat entering the tank and maintain the extremely low temperature required to keep the gas in liquid form. Next is the secondary containment system, which acts as a backup safety layer. In the unlikely event that the primary barrier fails, this layer prevents the LNG from reaching the ship’s hull. It is typically made from composite materials such as Triplex, combining aluminum foil and fiberglass for strength and impermeability. There is also a secondary layer of insulation that adds further thermal protection and structural support, ensuring stability throughout the voyage. All these layers sit against the ship’s inner hull, which is shielded from the extreme cold. Without this protection, the hull steel would become brittle and unsafe. In simple terms, the primary barrier holds the LNG, the secondary barrier provides backup protection, and the insulation keeps everything cold and stable. What you’re looking at is not just a tank, but a highly engineered cold containment system that makes global LNG transportation possible.

@Andrew_Jordan_ @BMA_James_Steen @TheBMA Why do you pick 2008 as your start point?

3.5% is an insult to doctors who have suffered real-terms pay erosion since 2008 BMA staff have worked tirelessly to support these pay restoration campaigns Yet @TheBMA is once again only offering these staff a below inflation pay award of 2.75% - this isn’t on #FairPayattheBMA

@TommiPedruzzi Claude

I’m convinced: Claude is the most powerful AI tool for making money right now. I use it to create 90-page nonfiction books it generates $50,000/month. I’ve compiled all the prompts I use into a 53-page PDF: • Find niches people already pay for • Write full chapters in minutes • AI cover prompts that get clicks Plus bonus resources to help you start today. Free (for now). Like + Comment “Claude” I’ll send it to you. (Follow so I can DM) ⏳ Taking this down in 24 hours.

@Steven_Swinford So it can be shut off remotely, but there is no backup of messages? Sure.

Exclusive: Police did not investigate the theft of Morgan McSweeney’s phone because officers were “too busy”, despite the sensitivity of his messages and contacts Sir Keir Starmer’s former chief of staff told the Metropolitan police that his phone was stolen as he returned home from a restaurant in central London on October 20 last year The theft of the work device means that McSweeney’s WhatsApp messages and texts to Lord Mandelson, the former ambassador to the US, cannot be retrieved. It has led critics to question whether the phone was stolen The State of It, the political podcast from The Times and The Sunday Times, can disclose that McSweeney told police the phone was taken by a man wearing a balaclava on an electric bike. The man grabbed it out of his hand as McSweeney was responding to text messages and cycled off. McSweeney gave chase but was unable to keep up Scotland Yard has a record of the incident but did not carry out any formal investigation. Officers did not speak to McSweeney directly because they were too busy. He was given a crime reference number and the case was closed McSweeney reported the theft of his phone to No 10 and the device was shut off remotely. He was given a new device with the same number the next day. The theft of the phone was first reported by The Sun on Sunday thetimes.com/uk/politics/ar…

@steveclapham He rode the quality growth market well (and made a fortune in the process) but unlike some peers he has not adapted to a changing market. I’m not sure if it’s hubris or arrogance but it was enough to sell several years ago.

@steveclapham As a former investor, my sell was his changing his mind on things, as you point out: wouldn’t invest in drugs, then did. Said for years wouldn’t buy Amazon, did, then sold quickly. Why is he waiting on Coloplast, it’s liquid, sell it and buy back if you like the CEO.

$1 of equity inflow can move a stock’s market cap by $3–8. That’s the inelastic markets idea Terry Smith highlighted at the Fundsmith meeting. Passive has overtaken active in the US, and the top 10 S&P names are 34% of the index and drive the bulk of the returns. According to Smith, we’re not just debating stock valuation any more. We’re looking at how a market works when price is set mostly by flows. This is not new, but its impact on active managers is causing dislocations. I wrote up the implications in my latest Substack. behindthebalancesheet.substack.com/p/are-we-back-…

@rhomboid1MF Great use of shareholder funds

#BRCK WTAF

@Uzocapital Estate agents often (from my survey anyway) begrudge paying the rightmove fee but feel they have to. Often feels to them like a tax. A move to instagram advertising and general dislike for the platform could drive many away over the years.

Rightmove $RMV.L & Autotrader $AUTO.L trading on 13x GAAP PE 2027….growing UK monopolies with pricing power, 50% free cashflow margins. Struggle to see why a dominant 2 sided network + destination website gets disrupted by ai vs layering ai tools themselves? What am i missng?