RE:RE:RE:This could happen any time..to lock value :Is ALA NEXT?I'm OK with partial dispositions of assets that no longer fit the company's strategic focus. I was thinking more in line with selling the entire company. An example is the sale of Tim Hortons several years ago where there was no reason to sell the company. What concerns me at this juncture is a hostile take-over for a small premium by a venture fund that would then split up the company to "extract value". The value would then accrue solely to the venture fund. This is one reason I was hoping for a higher dividend raise in December. A higher dividend would have resulted in a higher share price providing some protection against vulture funds. I get the long term rationale for balancing growth with modest dividend increases but in the short term the low share price makes this company a sitting duck.
A good percentage of these extract value exercise leave behind a lot of broken lives and the extracted value goes mostly to people who don't need the extra value.
Capharnaum wrote:
I think the idea would be to either sell one part if value isn't recognized by the market (is: Midstream worth $15, Utilities worth $20, Combined trades at $21). In that situaiton, selling Utilities for $20 would increase shareholder value, even if the Midstream portion trades at $12 afterwards.
I think they are also open to spinning off the parts (so you'd have three stocks, Altagas owning both other stocks, then one stock for the utilities and one stock for the midstream), if they think it can help maximize value for shareholders.
That's pretty much what Randy said on the last CC, that they wouldn't look at it now while they're growing both faster than peers, but they would look into it once growth slows down a bit (he said in a couple of years), to maximize shareholder value.
For my part, I really like that management looks hellbent on raising shareholder value.