Reitmans Ord Shs V.RET.A

IDG…Superb Complementarity with RET

[nozzpack]

Idg is a cash cow on Steriods in its Q3.
It cash flowed $172 million in Q3 which is the Xmas Quarter which boosted the cash position by $122 m to $149 million.Thereafter, it is cash flow negative for the next 3 quarters .

RET is solid in Q3 ..over Xmas..but not so with net earnings .

Rather, RET is very strong in Q2 and Q3 when IDG is very weak.

So, cash flow wise, acquiring RET makes a lot of sense.

They can buy Control of RET by simply paying $75 million for the Reitmans total  holdings of 7.5 million RET shares .
Im sure they would sell for $10 per share.

Lots of synergistic gains by acquiring control of RET....

[filoux004]

Interesting analysis thanks ...you may want to add the Reitmans would probably retain their real estate holdings. Glta, but why would Andrea ex president of Indigo jump ship , is that just temporary while the dust settles at indigo. 

[filoux004]

Worth nothing Rius CEO of Indigo spent 41/2 years at Jigsaw a british  mid range women clothing retailer.  Glta Bottom line I'm sure Riesman/Schwartz and Reitmans are well acquainted. 

[pennylane101]

Personally, I don't see how the Reitman family would accept $75 million for the business considering their real estate holdings alone are over $100 million.  I would also think that in the event of a change in control, that minority shareholders, including non-voting shares would have a say in the matter. As for Andrea jumping ship... maybe she hasn't left the Reitmans umbrella of

[pennylane101]

I meant to say "maybe she hasn't left the Indigo umbrella of companies"

[nozzpack]

I did not mean the real estate, just the business apparel business. Both companies have e commerce sites and both are now into diversification by attracting other products for sale through their e commernce sites.. Lots of integrative efficiencies ...  

[TheCount11]

Haha.  There are a couple of different ways to interpret stockhouse posts.  It took me a while to figure it out but I now find Stockhouse to be a weak indicator of marginal investor sentiment.  That really helped me in Q4 when sentiment was uber bullish.