RE:RE:Who Are Mittleman Bros?Thanks for the post. I have been following the Mittleman Bros for a while now, and due to their involvement with Revlon, I got in and out in time to do OK on REV, which is their second biggest position.
Part of my bullish approach to Aimia deals with Mittleman's current needs. As you pointed out, their fund traditionally has done very well, but the last 5 years they have underperformed, mostly due to their epic fight in Revlon with Ron Perelman who is a bigger fish than them and outfoxed them, at least in the shortrun. Their subscribers tend to be pretty loyal, but they aren't going to be loyal all that long unless the returns come back soon. Mittleman needs a good, big win here, and I think they see Aimia as the horse to make things right. There is no way that they can put up with the Aimia board deciding to spend 1 billion dollars on Sainsbury's 2.0 and a bag of magic loyalty beans.
Mittleman's agreement that got P. Mittleman on the board also forbids Mittleman from making any takeover bids, or moves to take it private, or supporting third parties doing either, until July 2019.
if the deal is approved, and i think it will be, we will go intto a quiet mode untiil some announcement about the future plans is made. The board will have to make that announcement before July 2019, becauuse if they don't, then the gloves will be off and it will get very interesting.
cliffncindy416 wrote: To add to your point, Mittleman Bros are a firm/partnership comprised of three brothers, Chris, David, Phillip (the one on Aimia's Board). All of which are individually purchasing shares as well as for their clients. In aggregate they own ~18.9 percent of Aimia.
Mittleman's investment returns (as a firm) since inception is ~15.6 percent net of fees. Over the past 5 years their performace has lagged significantly, given the divergance between Value and Growth, net annual growth over this period is 1.4 percent. As seen in other market cycles when growth converges, value tends to outperform. However the past is no barometer of the future. Other 'Value' investors, Prem Watsa for example have also underperformed (also, partially due to attempts at macro bets).
With excellent money managers such as the trio of brothers, we would be fortunate long term to have one of the Mittleman's take the helm in July 2019 and allocate capital moving forward to maximize shareholder returns rather than liquidating. Each shareholder can then do their darndest to beat 15.6 percent annualized over a 16 year period.
I am no expert, but I would be willing to speculate that the Mittleman's take a run at the company either through tender, open market purchases or some form of merger post Aeroplan sale. There is enough ownership by the activists to put forth a formiddable proxy battle come July if the Board does not bend over and take the Mittleman bros. allocation proposal (without seeing the proposal I can be damn certain whatever presented is much better than anything the legacy Board can dream up to squander).
I know some are thinking, 'I can beat their 1.4...a pittance,' that is a yardstick most can jump over. However, most don't have a tax loss carry forward...
Apologies in advance for thinking aloud