RE:Bam now determines the value of Bpy via the .3979 metric .Hi BB,
Your post forced me to actually do some calculations on the details of the agreement and while I agree the risk of owning BPY shares from here will track BAM's share price but I do not think it is as linear as you calculated. So here goes:
(i) If I choose to take cash and I do not get prorated down, I get US$18.17, a 2.4% return (on the April closing price) for say 3 months which is an annualized return of 9.2%...I will take that no problem. And I could care a less where BAM shares trade going forward. (The press release was worded like a 2nd year university finance course...lol).
(ii) At this point, I would never choose the preferred share option as they only told us there is a par value of $25 but no detail on the coupon....did I miss something?
(iii) If we get prorated down to 50% cash, 42% in BAM shares and 8% in pref shares then we are only exposed to 42% of the the volatility in BAM shares until closing and you get a 9.2% annualized return on the cash portion.
This is an attractive short term investment play in my opinion.
In terms of your future spin out comments....I totally agree and BAM has a history of doing this with their subs over the years.
Vette