RE:RE:RE:RE:New Press Release - Stelco Holdings Inc. Announces Purchase and Cancellation of 5.1 Million Shares and Extends the Expiry Date for its Substantial Issuer BidJust a little history on the share ownership structure I found online that I will share with the group here:
In May 2021, LG Bedrock Holdings sold 6,670,000 common shares at $33 per share by way of bought deal secondary offering for gross proceeds of $220 million. Prior to the secondary offering, Bedrock Industries Coperatief U.A. held 34,172,315 common shares, representing 38.5% of the issued and outstanding common shares. Immediately following the commencement of the secondary offering, Bedrock Industries distribute in kind of all of its common shares, including shares sold in the secondary offering, indirectly to LG Bedrock Holdings LP and to Stelco Executive Chairman & CEO, Alan Kestenbaum.
LG Bedrock Holdings LP’s general partner is LG Bedrock Holdings GP LLC, wholly owned by Lindsay Goldberg.
So in general Alan K. and Lindsay G. provided capital to get Stelco out of receivership.
It appears that Alan K. has decided to stick around and run the business while Lindsay G. has decided to cash out his holdings as a strategic investor.
Seen this done recently in one of my other holdings (North American Palladium) that was eventually taken over by a South African company. Strategic investors want a solid return on their investment and normally accept a lower bid than the market for their shares as an acceptable exit strategy.
I see this recent announcement as a positive as the 5 million share block did not cause an overhang in the stock price and as I stated previously it is Alan K. who is running the company and not Lindsay G. so it was only a matter of time before Lindsay G. was going to cash out.
As to the price being below the $35 SIB floor, I hope anybody that is retail that is buying this small discount to tender their shares at $35 understands that you better be doing this in a tax friendly account otherwise you will be in for a rude awakening when hit with a massive tax bill when a chunk of the $35 is treated as a deemed dividend.
GLTA