PoorBG

@chesir3cat @PawlukZenon @BrownMarubozu Yes, appealing to the Hitzigs, but I think unappealing to pretty much anybody else.

@ThePoorBG @PawlukZenon @BrownMarubozu Appealing to him at our expense. Wonderful 🤦‍♂️

$ACD.TO has one more deal after the sale ⬇️ before they can refinance the debt. The banks gave them until the end of March but will likely extend if needed. Before then we should get an update with Q4 results. The next logical step is an MBO as the returns are compelling.

@PawlukZenon @chesir3cat @BrownMarubozu The Hitzigs own around 2.2M shares (25%), $4.5M principal of the debentures (17%), and $11M of notes ($62%), vs Beutel/Oakwest owning 2.1M shares. If Hitzig really thinks Accord 2.0 has legs then an equity swap could seem appealing.

@chesir3cat @ThePoorBG @BrownMarubozu I directly asked the CEO months ago if once the US assets are sold if his family/ the BOD is open to a sale of the Canadian platform and he answer was "yes it is." So no we see. I own 50k shares that I acquired on the thesis they sell. So now I get $150k or diluted shitco shares

@PawlukZenon @chesir3cat @BrownMarubozu And now David Spivak has resigned from BOD. Sadly this looks like the smart guys jumping ship to distance themselves from what's to come.

@chesir3cat @ThePoorBG @BrownMarubozu I wonder if Beutels and Hitzigs had a falling out. The last year has been pretty disastrous for Accord and Hitzigs were the architect behind the failed US expansion and ultimately the operators who drove this to the brink of default. More will be revealed.

@PawlukZenon @BrownMarubozu @chesir3cat $ACD.TO Can kicked for another month. I'm getting the impression they hope to restructure the debt and soldier on. Not sure what to make of David Beutel's abrupt resignation. Maybe he intends to launch a bid for this mess.

@PawlukZenon @BrownMarubozu @chesir3cat So... do we get some Friday after-market news about the bank facility?

@BrownMarubozu @PawlukZenon @chesir3cat Precisely my worry.

@PawlukZenon @chesir3cat @ThePoorBG I’m worried they do a debt exchange for equity and we have to wait longer to see if the business can be profitable enough for a rerate.

@PawlukZenon @BrownMarubozu @chesir3cat Thanks for the updates! What gives you confidence that we'll get meaningful news this week? (eg. not just another extension of some type)

@BrownMarubozu @ThePoorBG @chesir3cat Not sure whether it'll be asset sale followed by a special dividend or an equity buyout. I'd like an equity buyout so we can take out money and run, and not sit around all summer owning a public shell. We'll see in a week how close or far I am. $ACD.TO

@BrownMarubozu @PawlukZenon @chesir3cat My simpleton thinking: it's a tough environment for private lenders, there's material uncertainty in Canadian economy, and it would be a sale under some duress. I'm just assuming the loans wouldn't sell at book, but this pessimism may be unwarranted.

@ThePoorBG @PawlukZenon @chesir3cat Why shouldn’t they be able to get at least tangible book?

@PawlukZenon @BrownMarubozu @chesir3cat I can't imagine they would fetch more than $4. I just hope the mention of "Accord 2.0" in the letter to shareholders is kabuki theatre, as opposed to true ambition.

@BrownMarubozu @ThePoorBG @chesir3cat The deferred tax asset write down is understandable/ fine. The $15mm PCL is a pretty big slap in the face. I think we should be nearing the end times now where the Canadian loan book can be sold. But I think we're looking more at $3-4 rather than $6.

@chesir3cat @PawlukZenon @BrownMarubozu It looks like the book value will "rerate" to match share price. That Q4 report isn't pretty. Ugh. 🤢. .

@PawlukZenon @BrownMarubozu What mechanism forces $ACD.TO to rerate to closer to book value? I had never heard of it before seeing your reply here so forgive my ignorance.

@sertachewyjcrew @AlvaroJS90 First reaction was "WTF?". Second reaction was mostly Fs. That Johannesburg listing will surely expedite their use of the NOLs....

@AlvaroJS90 Totally useless. Why is the company wasting their time on this?

AIMIA $AIM.TO will start trading in South Africa from next week to help improve the liquidity of the stock and facilitate their plans to acquire controlling interests in public companies. They might add share listing to other stock exchanges in the medium term as well

@ZiemzFinancial I'm surprised none of the analysts asked about the 2.6b figure. Or maybe they did and I missed it? Was noisy here and couldn't hear everything.

$hr.un so did they just pull the 2.6 billion asset sale out of thin air last year when they announced it. Because only announced part of it and on call say they still have plans to sell a bunch but just gave estimate of 500m to 1 billion on those sales... Thoughts?

@JibbyCap @sertachewyjcrew Thanks. I listened to the call and went through that deck but had forgotten some of the detailed comments.

Again, I'm not ecstatic that they sold for this multiple either, but see slide. The second point implies that even though they are going to look for acquisitions in the UK, they might find something that has operations in NA so they can start using the NOLs. (I had not considered this in my previous comments) Third point I think carries the most weight. Bozzetto had a clause in its debt agreement that forced it to pay off the debt before it could transfer any significant sums to the holdco. If you want to free up capital to do M&A then Bozzetto was not going to be much help for a long time. Fourth point is also fair imo -- European chem is not in a great spot and I'm not sure multiples would increase any time soon, esp in the niche Bozzetto is in. So in short, they can wait years for a better multiple that never comes, and meanwhile they can't use any of the cashflows. (Not trying to defend this decision btw. Maybe it would have been better to wait for a better deal, idk. Just trying to explain their reasoning.)

My thoughts on AIMIA $AIM.TO after the Bozzetto sale: - I don't really care that Bozzetto sold for a lower multiple than some (including me) had hoped. Yes it results in lower NAV than modelled, but most of the value depends on what they do with the cash. - The co has a shitco reputation for obvious reasons but IMO that is no longer warranted. Rhys (the chairman) is very shrewd and has repeatedly proven himself with regard to public co capital allocation. He is well incentivized through ownership. - Because of that, I dont think 'bad' capital allocation (in the traditional sense of overpaying for M&A) is going to be a problem going forward. - A greater risk, IMO, is market perception. There is a clear conflict of interest between AIM and Milkwood (Rhys's fund). We know he's going to do an acquisition in the UK, and we know that's where Milkwood is invested as well. And Rhys has plainly admitted on earnings calls that there could be some overlap between the two. - This is obv going to raise some questions the moment any deal gets done where Milkwood is a shareholder. Milkwood will be a direct beneficiary of AIM pushing up stock prices by buying a controlling stake in one of their holdings (regardless of whether that is through a buyout offer or on the open market). - That said, it could be a win-win situation: AIM buys some cheap mismanaged UK co that Milkwood also owns. AIM patches up the co and starts drawing cash flows. Meanwhile, Milkwood also reaps the benefits of having a better governed company. Both parties are better off. - Arguably there is even some synergy there because Milkwood could provide some extra firepower for getting a controlling stake. And Milkwood being involved means Rhys is already familiar with the co and has an idea what to do with it. - If you're investing for the short/medium-term, a lot depends on how the market takes this. AIM has been through a lot, and I don't think investors will have much patience for another fun experiment of getting the company intertwined with a fund management biz led by a controlling shareholder. - On the plus side, AIM is incredibly trigger-happy with the buybacks, so if this crashes the share price, I'm certain they will buy back as much as they can so that long-term holders will benefit. - Looking purely at fundamentals then, by my math AIM is still trading at a ~20% discount to NAV, even without accounting for the NOLs. And the playbook is simple: Rhys buys some moderately cheap cos in the UK, say around an 8x FCF multiple, and then juices that up through improved operational management and better capital allocation. If that doesn't close the discount to NAV, AIM continues to hammer the buyback. Once the NAV discount is closed and they have enough cash flows from their UK based cos, they start investing in NA to make use of the NOLs. In essence you're getting a 25% NAV discount on what could be a very interesting serial acquirer with a ton of NOLs. - There's also the possibility that AIM invests in a company where Milkwood is not already involved. Which would be a lot cleaner but not necessarily better for long-term shareholders. So in summary: I think long-term this will work out well. Short/medium term you might be in for a ride. Disc: long

@JibbyCap @sertachewyjcrew But if not for NOLs, then why the hurry to sell Bozzetto at <7x to buy something at 8x (or whatever)? I just don't understand that strategy.

The reason UK companies trade at lower valuations is not because they are more complex. It's because they are in the UK. Rhys might not have PE experience and I agree that his ability to 'operate' a company is largely unproven. But he is not some passive shareholder. See his very successful turnarounds at $JSEIOC and $JSEART for instance, where has had influence on capital allocation as well as operations to various degrees. Even if he's not a good operator, he could just buy a stake in something, improve capital allocation, and leave operations to someone else.

@AlvaroJS90 Looks like a lower multiple than their bargain purchase price? And the EUR/CAD was 1.47 then vs 1.62 today.

AIMIA $AIM.TO sells its stake in Bozzetto for circa C$270M. It was acquired in 2023 for C$258M I was hoping a better EBITDA multiple (TTM Adj. EBITDA was C$64M) so not the value creation I expected. Waiting for the "good use" and plans with the proceeds

@Rodbhar Thanks. That was my interpretation, too. 10yr rate has moved a lot in the past 6-8 weeks.

@ThePoorBG I believe the rate is set on first draw

Approved by a "majority" of 44%?? What am I missing here? $MPCT.UN

@acorn_capital @Rodbhar @Fred03288871 It's kind of funny. The entire purpose of that release was to disseminate a single piece of data. And somehow nobody noticed the error?

@Rodbhar @Fred03288871 Has to be a misprint. If it is the case, very bad look for the lawyers/management.

@tsxman @TSXDivStock Exactly. Seems very strange to guide to 2.6b, then confirm 1.5b with no indication of the nature of the remaining 1.1b. Clearly not just the properties in negotiation, so what gives?

@TSXDivStock @ThePoorBG I just wonder where is the rest or is there more coming? It's below the number they pointed out. If we add the other two offices noted at the bottom in negotiation that may be $250m. Still missing something. Overall it is a positive without question but seems incomplete update.

$HR.UN out with an update confirming $1.5 billion of office-retail sales. Only new asset listed was ECHO as I suspected weeks ago. Now 83% residential and industrial. Almost no retail and very little office. Release says remaining office-retail will be immediately marketed.

@TSXDivStock @tsxman Is selling at IFRS a surprise? After the writedowns I would think this is the base case?

@tsxman So will the market be happy with this progress, and the disclosure that the sale is in line with IFRS (huge positive!). Or disappointed that it's $1.6 billion instead of $2.6 billion?