Lassonde & Peller (LAP.TO)As a shareholder in both companies I'd like to see a merger. Remove the dual class share structure of both companies and create liquidity for Lassonde. I believe this would unlock value in both companies. One company, one share structure. LAP.TO with both families owning a large piece. Current Lassonde shareholders owning the majority.
Lassonde - great balance sheet, but limited options to grow with many big players in the beverage industry. Instantly become dominant player in domestic wine market. Acquire great assets. Combine with existing small wine business. Further acquisitions and consolidatation in the wine industry. If they have ambitions to be in wine, now is the time to do it. Cheaper to buy then try to grow organically. Acquire great brands and estates and the bottom of the cycle.
Peller - high debt, limited options to grow. CEO exiting. Needs/looking for new leadership. Access to capital to transform wine industry and new experiences in Niagara and Estates. Accelerate timeline and gain competitive advantages.
Sun Rype aligns with BC wineries and estates.
Together I think there are synergies and SG&A cost cuts that can unlock value for both companies. Proforma revenue of close to $3 Billion and increased scale. Proforma earnings make sense? Depends on synergies and overhead cost savings that could be achieved including packaging, logistics, etc...
With a merger, both families still have a stake although I don't think either would want to give up control.
Before COVID, both companies were doing much better than today. Trying to think of ways to unlock value for shareholders.
Immediate solution to complaints by investors. Dual class share structure. Lack of liquidity for Lassonde (usually less than 1000 shares traded daily - no-go for larger investors). Peller debt problem solved with capital for transformative investments. Synergies and SG&A cost cuts to drive profitability and market share.
Just some weekend thoughts...