RE:Nice Q3 - Market Doesn’t CareAgreed, Q3 performance was solid, particularly considering the softness in commercial property. Melcor remains a screaming buy.
I am quite happy to continue holding Melcor for the long term. If they continue peforming as they have in the past, while continuing with opportunistic buybacks, book value could easily surpass $100 a share in 10-15 years. And all the while, we collect a juicy dividend. So to me, it would be terrible news to wake up and see a privatization offer below book value per share; I would vote against it, and would beat the drum to encourage my fellow minority shareholders to reject it.
A smarter strategy for Melcor is a stealth privatization, something that may in fact already be underway in its early innings. This would entail persistent NCIB purchases, ideally augmented by SIB repurchases from time to time when capital can be made available. Over time, this would reduce the minority float to next to nothing (just my holdings) This has three advantages over an outright privatization: (1) the party making the takeover does not have to fork over cash; (2) the average price per unit will be much lower; and (3) there will be no resistance from minority shareholders, since the NCIB and SIB repurchases are entirely voluntary (on the contrary, there would be lusty support).
Just my opinions, as always
Baby Bunny