RE:RE:RE:RE:Going privateYour links just take me back to the most recent Bullboard entries, not to any specific entry, so I can't see whatever entry it is you have in mind.
I understand that the common shares traded on the TSX are the shares of the income trust, not DCL, so of course the income trust owns all of the shares of DCL. I dont understand your point about this.
The trust has the right to buy, for money owed, one of the units of DCL. I dont know what the value is of this unit, but the value would accrue to the shareholders of the trust, the way I see it.
The trust says it owns 100% of the participating notes, whatever these are, in the strategic review release, and also that the preferreds are listed separately on the txs as dmn.pr.a. This suggests that any strategic transaction has to be voted on by both classes of shareholders. Each class will likely have to separately approve a deal that applies to their class of shares. What rights the participating notes carry is something I have not looked into.
I'd like to see the trust purchase for a nominal amount all of the assets of DCL and then close down DCL. Then it can change its nature back to a regular public company. Who knows, maybe there might be some tax advantages to doing this. Colabor seems to have done something that was an advantage when they reverted, although to be fair they are still in a dispute with Revenue Canada about this. Richards Packaging is still an income trust and still pays distributions as capital, not income. I dont buy the "this structure is too expensive" argument from Dominion. I think the real issue is that they cant make enough profit from running the company, and they can't find an operating structure that can increase the profit and will attract a good competent person to lead it. The large insider shareholders can't or won't find a way out of this so just want to sell. That's the way I see it. The only solution is money. I think the inside shareholders, especially the Blairs, should buy out everyone else, find a good long-term CEO, and THEN try to sell the company. They are right that a simpler structure is worth more.
It seems a while back that the company tried to force something that was not fair to the holders of the preferred, so there was a spat, but the eventual resolution is not clear. It would be nice for the preferreds to be redeemed and money owed paid out, but the company is not making enough money to do that. Perhaps a compromise can be found? I hate to see it, but sometimes common shares are issued as part of a settlement, so a dilution occurs for existing common holders. Other times money is found by some kind of third-party deal, and maybe that's what the trust is looking for in the strategic review - someone to buy out the preferreds, and possibly the common too. If this is the case then it would make more sense for the insiders to come up with the money and then sell privately or go public again down the road with a simpler structure once the cost savings are in place. If they really wanted to do this then it may take a long time, since they will probably wait for a low share price. The recent share price increase is likely just speculation on the possibility of a transaction benefitting common holders at existing seemingly depressed share prices. I dont see it going much higher, and in fact the longer it takes for anything to happen the share price will likely drift down again.