Self Dealing Transaction.This most recent transaction announcement where they say the Public Co. "acquired" a property, it ain't really so. Speaks volumes to the kind of people we have as Managers, BOD, and our control shareholder. Total BS transaction.
Real Estate is a very liquid and highly valued investment, especially in Vancounver Metro.
IF the control shareholder wanted to sell their 50% interest in this property, they could have sold it on the open market to a 3rd party purchaser, and the Public Co Madison Pacific Properties could have decided to sell their seperate 50% interest or not, at that or a very similar valuation.
The control shareholder upon the sale of their interest in the Property could then decide after the sale if or when and at what prices to purchase shares of Madison Pacific shares in the open market just like every other shareholder.
This BOD are obviously a bunch of lackies for the control shareholder because not only did they "approve" this transaction, they gave the insider even more voting shares in the deal.
This is the kind of garbage transactions they do on a daily basis in Candyland and the regulators, governance, and securities commissions let them get away with this on a routine basis.
BIG warning sign went up. Stay away from these kinds of people. They will steal your shirt off your back if your not looking.
The likely hood of the minority shareholders getting a fair shake on the JV in Mission for all the land just went down a fair bit. If they will take a little from you here on this 50% interest in this smallish industrial property what is the likely hood they will steal from you even more when 10's or 100's of millions are involved?
Good corporate governance would say that IF the industrial property is worth the $17M or so valuation, being 50% interest for the cash purchase price plus the assumption of debt, then why bother to vend the 50% from the control shareholder onto the public Co. where their economic interest in the properties being exchanged is lower. Better to avoid the appearance of self dealing like this in order to win the confidence of institutional and private investors that they will get a fair shake always in transacting with the company.
This transaction says loud and clear that either the appraislal is inflated for the property, or the shares are undervalued of MPC, or possibly a little bit of both.