MCS Steel Non-Voting DR MSTUF

Buyout Price

[RonaldCalm]

Just returning from the Vancouver Outlook conference. I spoke w Jeff Olin, the head of Vision Capital, regarding the Buyout price. Jeff's opinion is that the price is undervaluing the assets. More candidly he stated that the operator is taking a busload of cash and throwing the shareholders under the bus. I was not surprised at his position on the valuation , but was a little surprised by his opinion on the company's principal. As they always teach you in investment courses - you've got to know the management. In any event I would hope the majority of owners refuse the offer price. In this market there are very few places to hide. Why sell this refuge at a discount.

[junglejames]

go to their website and send them a note saying you will be voting no.  The more noise the more they are likely to go back and ask for more (after all management will benefit directly too if the offering price is raised).

[snewguy]

I don't know how accurate the numbers are, but Morningstar says institutions and mutual funds own 1.32 billion CDN in equity. If there are say 80.5 million shares at 21.35, that gives a value of 1.72 billion.  Rough numbers but that is 76%ish.   They need 67% to approve the takeover. The average investor may not submit a vote but I would think the big boys will.  And some of

[maypeters]

the process definitely seems to be hurried and seems to be benefit the buyer more than the seller. There is no need to sell - we just paid a bunch to internalize and management got a bigger % due to the internalization - also dividend just increased from Jan and now they sell out such a well composed portfolio.  Someome is definitely making a quick buck some way. 

[snewguy]

that someone is clearly management.  internalization.  and then you agree to a 53 million dollar breakup fee with that offer with analyst targets 22-24? a strong and growing US real estate market that is not over?  Just my thoughts and considering Starwood is not a stranger to these guys.  Its not a highly insulting bid, but there is no premium to future upside.  

[snewguy]

to you guys disagreeing with my comments, who else would it be?  and if you don't agree with me, than I guess you will vote yes, cuz you clearly don't think the bid is low.

[maypeters]

Probably management thought that internalization meant something else.  The break up fee really makes this deal suspect - they do not want any further bidders and Starwood gets a nicely assembled portfolio with all the systems in place. Starwood also saves on the mangement fees on the 24K odd homes managed by Milestone when they did the joint deal.  Win Win for Starwood and management

[snewguy]

do you think the cost savings etc..are reflected in the bid? and they know Starwood. its almost like there was a  plan in place thats my speculation.  timing!   and to negotiate a breakup fee like that, signals a motive that is in their personal best interest to sell to Starwood. somehow.  who knows about private conversations, contracts bonuses etc... it just sounds

[RonaldCalm]

Good Point. I did just that, and encourage others that feel the price is inadequate do the same.

[TimeBuilder]

FYI: We will be voting NO ...if and when we get the chance....Also we have told them so...not a large holder BUT believe the price is low balled for a reason that we do not know of....Will hang to the bitter end on this holding...GLTA patient holders, TimeBuilder