RE:RE:RE:Any reason to retire the preferredsIf my memory is correct, I think Lowes initially made a complete lowball offer for the prefs... And the holders rejected it... So it kept on trading for about 1 year after the deal with Rona was complete, at which point Lowes came back with a more appropriate offer that got approved.
I think the Prefs are looking like a good buy here... Assuming Alstom deal closes, we'd be looking at a business as usual scenario with a reasonable price for the prefs and maybe 7-8% yeild.
pierrelebel wrote:
Hi A.Oehler - Much depends on the actual rights given preferred shareholders at time of issue (check the original prospectus).
For example, recently in Canada we had two companies taken "private" (meaning someone purchased all the common voting shares).
One was Capstone Infrastructure. The preferred shares (CSE.PR.A) were not taken out by the controlling shareholders. They are still trading on the TSX (under $13) and pay about 6.4% annual yield. Next redemption date is July 2021.
Rona was another one. When Loews purchased control of Rona, at first they ignored the preferred shares which continued trading for some time. Eventually they were pressured to make an offer for $24.00 (less than the original $25.00 paid by investors)
Full disclosure: my wife and I still own CSE.PR.A while we sold our Rona preferred about three years ago.