Weak or just new? Wasn’t started by the right guy. Pretty rocky shaky start. What is the company?
Under the hood of this is the fact that mgt. needs a strong chair.
He works best being told what to do and he figures out how to do that. Evidenced by buying a PEI property, home of underwoods (whiterocks) first purchase when he was a VP. No originality here, look at the name didn’t even get to name it but buy a manufacturing guy turned owner of dog hockey club and very small time developer.
Look at the insider equity - blew his load in the CPC- kelly put tons in the CPC. Wacked board- think of it, he knows worked in public markets for yrs and knows all real estete people. Best he can do is no names to the public with no public RE background?
Not structured well. Independent Director role for sub 250 million dollar company? Why? The company needs leadership.
Cavet: think most are structured badly- but cannot change the entire Canadian mkt. But Edge is especially bad- not as bad as maplewood (ex-homburg bankrupt losers).
Now it’s a divestment vehicle for a sale lease back and a single tenent- downward pressure much?
$68 million is too small relative to the steaming dump that the private equity TriWest needs to take on this company, using the shareholders for wipe.
My own thought could be that Triwest bought westcan in 2008-2009 paid a too much and are trying to exit partially to buy some time?
Private equity has to generally sell in 5 yrs after they buy- that’s when the fund has to sell everything and wind up.
bad structure, should have waited bought junkish properties for a bit to build up steam, access the market a couple times. The whole idea is identity? What is edge front?
In my mind the company was structured for a quick takeout, now they have this hanging over them if there is retained interest, good luck getting a buyout.
The company, even without this closing screams early takeout. I appreciate kelly wanting to take some money off the table, be his own boss but fact is he cannot- it’s not in his DNA without some chairman hand holding.
Possibilities:
Fizzles out, goes nowhere, cannot raise money limps along. Dividend goes lower and lower. Nothing changing until mgt bounces to private side or real CEO comes in or real non-independent chair, Kelly goes back as a behind the scenes guy, his natural role.
Or
Hostile poxy vote- couple new shaker uppers, (GEORGE ARMOYAN), rattles off the weak directors, gets k. on a plan or K moves to mgt position, strongman puts in CEO or he gets comfortable with his overlords and with his equity more likely would be a executive director and COO or president role- company gets bought out at 225m ish mkt cap.
Or
Potential Positive:
Company gets taken out soon, 2 yrs maybe 3 tops. I don’t think he can hold it together longer. I see a private takeout if this this the way they are going, Kelly organises a group, he moves to a VP/operations type role and they keep going privately.
Or
Kelly puts in real strongman Chairman with public company experience. Ideally a USA ex-reit CEO. And or current CEO stays or is moved to president role or COO, basically operations new USA CEO comes in. Puts this westcan behind them with frequent market raises.
I don’t have a crystal ball- really some of these Canadian reits were total messes early on- you really couldn’t tell, may be the case here but the board here is wacky more so that others.
To be a REIT means super strong, frequent equity raises because they have to give away all their money, if not it’s better to be a regular company, double tax and all.