RE: RE: If you call the company What is clear to me is that the way this deal was structured and the votes were tallied is the only way that the deal would ever be going to court instead of being dismissed.
It's obvious who benefits: The MTNs.
The shareholders (common) were probably more or less not knowedgable regarding what they were voting on and fell prey to the pervasive tactics persuading them to vote yes applied by Kingsdale.
I would be more surprised to hear that no preliminary Q3 numbers were made available throughout this process than to hear that they at least got to see preliminary Q3 numbers, which in my opinion, are probably the most important thing to consider if you are looking at run rate stabilization on a forward basis.
The company believes that this is best for them, but my question is if the debt could be refinanced, would they take it? It is my belief that the free cash flow is so robust that over time the company could still carry it's present net debt load of $1.5B and pay it down over time. The trick is simply retiming the repayments and the bank wants its money back, not shares. As such, they are trying to argue:
1. The company has too much cash to recap.
2. It is too soon to recap.
Both of these arguments do not hold any water unless supplimented with an action:
1. Extension of their credit facility.
2. Alternative plan proposed that is better for equity holders.
It wouldn't make sense for the banks to have an argument against the legitimacy of this recap now that the vote has gone through and it's got support. The fact of the matter is that the vote happened and it passed. Arguing the legitimacy of the vote needed to be done and dismiss the vote before it happened.
When's the last time you heard about a vote that went out and looked somewhat official in manner and order and then it was successfully argued that the vote was illegitimate and out of accordance with the rules.