Morguard Real Estate Investment 5 25 convertible unsecured subordinated debentures T.MRT.DB.A

Finger Lickin' Good 😋😀🤑

[babybunny]

Morguard Corp just took another big bite out of Morguard REIT without attracting notice.

My working assumption is that Mr. Sahi wants MRC to grab as much of MRT.UN as possible while the price remains dirt cheap.   This is a delicate operation though ... with so many shorts exposed, the slightest whiff of perceived good news could cause the REIT unit price to pop from $5 to $7 or $8, making the ploy less profitable.  So asset sales (which would thrill unitholders) never take place, there are no updates on developments such as Burquitlam Plaza, and there is radio silence even when major repurchases take place. 

Within the next couple years, I suspect Mr. Sahi will tire of tiptoeing around, and will have MRC put in a decent offer to buy out the remaining stubborn minority shareholders of MRT.   I think a fairness opinion will appraise the unit price somewhere in the low to mid teens (quite possibly higher a couple years out), and MRC will have to match this at least.  A big payday is ahead for those willing to watch paint dry and clip a 5% coupon in the meantime.

Just my opinions, as always.

[flamingogold]

I will wait. MRC owns over 60% of MRT.UN and MRC is majority held by Rai himself. There is very little institutional ownership here. In fact, everything Rai owns is the same. Majority ownership by one person with very little institutional support. This can be good and bad. A bet here is a bet on Rai alone. A self made money man. My money is on that.

[slst]

I think even a modest increase in distribution will put a small squeeze in the shorts.  Had they raised it earlier the pricing on the debenture would have much better. They paid a premium on the debentures and had to set the conversion price lower.  Sad miss while they were getting 3% mortages.   The "prudent" strategy does NOT affect the parent MRC.  However does