LIQUOR STORES NA LTD 4.70 PCT DEBS T.LIQ.DB.B

RE:RE:RE:some thoughts

[Goldbuggy1]

mike49 wrote: in my house we say SOCIABLE ! or some such,depending on company.
onward buddy.
p.s.-speaking of rum.v-perfect example for liq to cherry pick.
pfft

Yes! It may not be such a bad idea for LIQ to cherry pick RUM right now. RUM also took a big hit at the end of last year to the tune of 300% Drop. Rocky Mountain Liquor (RUM) has a Market Capital of $3.135M right now so with a premium you could buy it for $4.9M no problem. But the company also has $4.9M in bank debt and a further Debt of $9.2M in Convertible Debentures. So to buy out RUM the company would have to pay about $19M. You would thus gain 42 stores in Alberta (down from 46 stores last year) plus instance savings on admin fees (as you don't need 2 CEO's or CFO, or offices) Preferred Labels, and Warehousing. RUM also has a Liquor Store in Fort McMurray and Grande Prairie which could be closed to consolidate sales there, but surprisingly not too many of RUM stores are in competition for LIQ. Calgary with only 1 store and Edmonton with only 2 stores. LIQ would gain about $50M in sales so it becomes a question if paying the $19M to buy RUM out is worth that. LIQ paid $15M US in New Jersey for $25M US in sales, so it looks like it is. LIQ would also gain the licenses and could expand in areas they didn't have stores before with larger stores, thus increase sales. But what I find most interesting about RUM is that they are obviously more cash strapped than LIQ is. There Revolving Credit Line is only $10M, they are carrying huge debt, and all there stores are in Alberta. But yet RUM applied to the Stock Exchange and got permission on September 1st to buyback 5% of there shares. For the end of that Quarter which ended September 30th (1 Month) they bought back 162,000 Common Shares. Who said you have to be Cash Rich to Buyback Shares?