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Bullboard - Stock Discussion Forum Western Wind Energy Corp V.WND

TSXV:WND - Post Discussion

Western Wind Energy Corp > Brookfield's self interest
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Post by agrossfarm on Dec 06, 2012 12:34pm

Brookfield's self interest

will be what determines how they will act.

If they can not get the company cheaply, which is obviously in their self interest, the fall back position is for them to make a significant amount of cash by seeing the company sold for as high a price as possible.

Logic and the facts in the SEDAR-filed offer suggests what might be likely to unfold.

1. Brookfield served notice of purchasing 5% of the shares, in the Market. That means that they will not be likely to make a higher offer until they buy about 3.5 million shares. No way they are anywhere near that yet.  And since the market is above their bid, for them to make a profit on these new shares, they need the stock price to go over $3 by the end, just like Jeff. The higher the better, for all shareholders if a shareholder is not the buyer of the company.

2. It is to Brookfield's advantage to make their highest offer, if they are sure that other high offers are coming, to either win the auction or to ensure that some other bidder is pushed to bid higher. That suggests that Brookfield can be expected to bid and that they'd want to bid and win or to lose the auction but win a higher share price for the ~21% of shares they hold.

Brookfield may need a face-saving reason for increasing the bid, and Jeff could provide that.

Brookfield may be prompted to bid higher if they got some sort of information that higher bids were coming out shortly.  

On the other hand, if Brookfield believes that a Strategic will make a bid that would get them a yield of about 9%, then Brookfield would likely NOT need to bid to push the buyer higher because Brookfield is not likely to ever bid that high. And Brookfield would be (or should be) happy to sell at that price and pocket a huge windfall.

Comment by AdamWest on Dec 06, 2012 12:45pm
Doesn't Brookfield have to pay back a share of their profits to the people they bought their position from if the company is sold at more tha $2.50? Does anyone understand how that works? I have never heard of that type of arrangement before and I am wondering if I have misunderstood something.
Comment by agrossfarm on Dec 06, 2012 1:03pm
Yes, Brookfield apparently has to pay Goodman (the seller) at least a part of the gain. The full details of the deal were not made public but the wording of what was made public made it clear that some, not all, of eventual profits above the purchase price would be paid to Goodman, if WND was sold at a higher price.  Only the Parties to the share deal know the specifics. Brookfield will make ...more  
Comment by AdamWest on Dec 06, 2012 1:41pm
Thanks for the response.
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