RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:ELFfor the entirety of ELF's (UNC & EVT included) existence, they have ONLY used the private holdco's to aquire ELF stock (no NCIB or SIBs). hence the existence of the reciprocal shares.
this practice may add to the reciprocal share balance if done within ELF or by an entity that ELF has ownership in (think of this as an NCIB without the rules). if not, the purchases are entirely for the family's account and residual minority do not participate.
understanding this is fundamental to understanding ELF and the family's efforts to increase their ownership over the many decades.
the shift in 2020 whereby the companies announced the first NCIBs in their entire history (in UNC's case - 90 years), was the watershd event whereby it appeared all future purchases would benefit ALL remaining shareholders as opposed to singularly the family.
the lack of NCIB buying this year is effectively a return to the practices of the past century.
pushing the cash to the holdco's almost certainly guarantees future purchases will be dominated by the holdco's (and we will not participate in the accretiveness/disclosure to the same extent as had the ncib bought the shares)
however, pushing the cash out does not eliminate potential for NCIB or SIB, but imo it does lessen it. ELF has nothing but liquidity in their portfolio and could sell anything, anytime to fund buybacks.
the holdco's however require the dividends to be cashed up to do their buying (or access to margin borrowing - which they have shunned throughout history). the only "margin" employed is really the pref shares at ELF and last years debt issuance but the holdco's would not have the abiiity to issue permanent debt such as this.
also, using the ncib telegraphs what the company wishes to do and Duncan is deathly afraid of being front run as occured in the 2013 "doubling" - an event in which ELF/family bought NO shares back after selling the Dominion.
you simply can not be involved in ELF unless you understand the family's actions wrt the discount and approach towards the creeping takeover at expense of minority. it is equally imperitve to understand all the historic discounts at which transactions/events occured - ie what thresholds the family wants to buyback shares.
that said, the discount and activities of the family in 2020 marked a major milestone and one that pushes us ever closer to the end game.