CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

3rd Quarter Results...

[Kherson]

Terrible yet again! Another large loss and the equity is now down to $10 million!
Kherson

[marcelisw]

This post has been removed in accordance with Community Policy

[phoenix_trader]

The COP for Q3 was $24 mill down $3 mill from Q2. Now subtract everything you can think of and it shrinks to zip. Folk, lots of fees here ($2.2 mill in Q3 alone) so the spinmeisters will have you believing this is the only way out. The problem is SPB's bus. is heading south and with it SPB's divvy. Pretty soon CUS's .01 divvy will look great compared to zip paid by SPB. Right now be

[Roxy27]

phoenix_trader, CUS and SPB are in the same business. So much so that the only risk to the deal closing is regulatory due to market share concentration. They are in a business that needs to consolidate, similar to the energy and pulp/paper industrias they service. Plus SPB has energy ditribution (heating fuel). They are much better off to combine. 

[dinosaur13]

Phoenix,  Say the deal is cancelled, and CUS retracts to $1.10 (what it was trading at before SPB). How do you envision them getting anywere close to the $1.70 SPB exchange ratio in the next 6 months? 

[phoenix_trader]

If CUS uses all available cash flow to pay off bank debt, we can expect a $1.70 print within one year. The $1.70 SPB exchange has disappeared with SPB's falling price from about $11.25 to today's $10.30. SPB issued stock at $10.35 less fees to do the deal, CUS did not need to issue shares and by cost efficient management can pay down bank debt fast... Vote NO !!

[dinosaur13]

Wow, I would like to see your math on how they can pay off bank debt within a year, and why you think that would push the price to $1.60-1.70 within a year...  Long-term Debt and Finance Expense: Canexus has US dollar borrowings (September 30, 2015 - US$127 million, September 30, 2014 - US$225 million) which create unrealized foreign currency translation losses as the Canadian dollar

[phoenix_trader]

Not one year but with prudent management maybe three and then you are left with the conv debs..............My major beef with this deal is that SPB is not materially stronger cash flow wise than CUS and seemingly has a few skeletons in the closet. I do not believe the SPB divvy is secure, bottom line are we any better off? The jump to smell immediately after the NATO close reeks. Vote NO!!!!

[dinosaur13]

What you are saying doesn't make sense... You purchase stocks with the hope to sell them for more than you paid for them, right? So why would you turn up your nose at a 30% return on investment from todays price in ~6 months, and opt for a 30% return in 3 years? This deal is the fastest way to get some bang for your buck out of an investment that has been trending downwards for some time

[phoenix_trader]

I bet most CUS holders have an ACB of +$2. Most expected and supported new management to deal with NATO (done) and use the chemical assets to pay off the banks. Instead they jump at the first opportunity to sell, why and what side deals benefit management. With SPB we are jumping into the fire with no flame retardation apparel. Your ID dates Oct 19th, can you explain why your sudden interest.

[dinosaur13]

Just so I am understanding correctly: CUS holders with an ACB of $2+ should wait 3 years for prices to recover from ~$1.30 to "maybe" $1.70 with current management, rather than vote yes for the deal and get ~$1.60 in 6 months? Gotcha. Why not take the deal, keep the SPB shares, collect your 6% dividend, and enjoy a larger more efficient company? Or sell your new SPB shares and put the

[rustyblades]

Phoenix, I'm of the same mind as you. Why sell now  One of the paragraphs in the earnings release that caught my attention was this one "Canexus' North American Sodium Chlorate business continued record breaking performance in Q3/15. Record COP of $19.6 million (Q2/15 - $19.1 million; Q3/14 - $14.5 million) was achieved." I prefer to hang on and see an undiluted upside

[Roxy27]

Ok, so as I understand your thinking; Investors overpaid for the CUS stock thinking that mgm't would deliver; mgmt didn't and stock tanks; now you recommend staying with mgmt so they can get you back your overpaid stock price in 2-3 years.  ACB is irrelevent. Holders get what its worth today, they are "owed" nothing. Today SPB is the highest bidder, which is a big premium

[ronstren]

Looks like the market likes it.