Brookfield Asset Management Voting Ord Shs Class A T.BAM

Market Movers

[retiredcf]

Brookfield Asset Management Inc.  dropped after it said on Thursday it will separate and list 25 per cent of the stake in its asset management unit, months after the Toronto-based company said it was considering the move to open up growth options.

The company will initially hold a 75-per-cent stake in the new entity, with the rest distributed to its current shareholders by the year end, Brookfield said.

Both the parent company and the separated unit will trade on the New York Stock Exchange and the Toronto Stock Exchange, the company said.

In February, Brookfield Asset Management Chief Executive Officer Bruce Flatt wrote in a letter to shareholders the company was “asset-heavy” compared to most of its peers, and that dimmed its appeal to some.

The split could also potentially attract interest from investors who do not want exposure to Brookfield’s other units, such as the reinsurance business launched last year, Mr. Flatt wrote at the time.

Last year, Wells Fargo & Co also streamlined operations by selling its asset management arm to private equity firms GTCR LLC and Reverence Capital Partners for $2.1-billion

 

[Karl63]

Can't say I understand the company motivation in doing this, and what it is actually that they're doing.  I take it this is related to the spike a couple of months ago when the price went to $79 for about a minute?  There wasn't much of a reaction in the markets today - maybe not enough time to digest the news?  Is it a positive move for the shareholders?  Can

[Defiance2050]

SOTP or Sum of The Parts valuation is what the analysts base BAM on. Other asset managers do not have such a large stake in their holdings and their asset management income is valued more.  Market has been selling off, the fact that it didnt go up could be alluded to the rumour that this was going to occur. The SOTP may also be impacted as people could be valuing the renewables and real

[Karl63]

Thanks for the excellent write-up.  So am I to assume that they'll give each shareholder a 25% special cash/dividend, and then we'll own shares in the "new" company which will be formed out of the remaining 75%?  I wonder how and when they'll make those value determinations?  Is this an incentive to purchase more shares at today's reduced prices?