RE:Oaktree making the roundsAlphaseeker1984 wrote: dosperros, FI4 and rinm99 - I have made the same decision as you all have. I sold some of my position in RYAM on Friday and repurchased TMB. I believe the most likely scenario is a higher bid for TMB sometime between now and the vote.
Oaktree is currently making the rounds with other institutional shareholders to pitch their version of the value of Tembec. When they have enough proxies another call will be made to RYAM and my guess a sweetened offer is then made. RYAM is not going to sweeten the pot without proof that Oaktree has the 34% needed to block the transaction.
dosperros - your critique of the RYAM response letter was good. Not surprisingly they cherry picked a few good points. With regards to the old vs new Tembec I would add that the old Tembec was sufferring from a significant depression in all of their commodity prices. The situation is fundamentally quite different now. Prices are on the uptrend in all key markets (including hardwood pulp) and the trend should continue for a while if one believes the world economy is growing and we are only early in the commodity cycle. Lumber is booming and so is SC. The lumber dispute will be resolved eventaully and cashflow will not be an issue for the ongoing modernisation efforts of the sawmills. Paperboard is stable and producing great margins. A reversal of the cycle will not be for another few years and when it comes it is doubtful that we will see as deep a valley as seen during the last cycle (which was brutal). TMB's debt will have fallen significantly and the risk profile will be very different.
Very interesting days ahead. RYAM will not walk away from this deal IMO. The value creation of the combined entities is too compelling. They may have to kick in another 100-200mm now but in the long run they will create significant value for their shareholders with the acquisiiton.
Good luck to us all!
Interesting!!!
RYAM shares tumbling today with the uncertainty. I am glad I sold yesterday on the bounce.
As I am now out of RYAM, I will move all my future posting pertaining to TMB back on the TMB board. Looking forward to all the dialogue over there
FI4