Looking goodSeems to me Elias Foscolos of Industrial Alliance probably did not come up on his own with the suggestion that the ALA dividend cut will primarily be driven by need to reduce dilution caused by the DRIP plans - not because of any need by ALA for funds to finance the acquisition of WGL. Brilliant. That should shield ALA from a class action suit from the investors in the subscription rights.
My bet on this.
(a) ALA will base their cut on the average share price for last 90 days - $15.00
(b) Target dividend will be from about 3% (Fortis) to about 6% (Keyera) and ALA will be looking to see the share price move up into the 20 + range
(c) Cut will either be 30 % (about $1.20) or 50% (about $ .90) PLUS an announcement of a share repurchase program with funds saved from dividend cut.
This will all make a lot of sense.
However dont think it will do much for present share price till year end. The shorts should start winding up but sales will continue by sellers hitting their margin and for tax losses.
That said in my opinion there is more upside to this share right now than downside. Sunshine should appear in the new year. Till then, best hang in and think of England.......