Quarterhill Inc T.QTRH

Thinking out loud - comments invited

[cabbieJBJ]

What if, in sequence:

1. A comprehensive settlement is reached with Apple  (this is key);
2. QTRH's stock price pops to $4.50; and
3. Management then buys out the rest of Wilan, including the name.  Fattoche, Skippen, Watchmaker and Vladescu are holding QTRH stock and options worth ~$15M and could be at the head of the line.  Other key management may be invited to join.

A $100M 5-year investment fund is used to buy out the rest of Wilan.  A fund established projecting 15% return plus capital return (estimated payout over 5 years is ~$141M) could be funded from projected Wilan normalized EBITDA (per QTRH latest investor presentation) of ~$30M/year.  The fund could be renewed or a new fund launched after 5 years.   

Key questions:

1. How secure is the ~$30M normalized EBITDA estimate;
2. What risk rate of return is acceptable.  My example uses 15%; and
3. Are there Canadian tax credits or carry forward losses to sweeten a deal?

Thoughts?

[TimeBuilder]

FYI  >  @  $  4.80  that would leave us Very Happy   With NO tax loss...  ;>O All the Best of the Season to you & yours.. Regards TimeBuilder ( a BB reader & a very  long term holder / Investor )

[mrmoribund]

Insider buyout of Wilan? Hard to believe insiders could be the highest bidder and even if they appeared to be. Oy. For starters they'd need a valuation done. And how can a valuation of something as intangible as a bunch of patents be credible? Every patent is different. There are no credible comparables with other piles of patents. A spinoff of Wilan, under different circumstances, might

[mrmoribund]

Actually, I'm not so sure insider buyers of Wilan would actually need a valuation. If a bidding group included board members they would, I'd think, have to resign from the board before making their bid. And their bid, to succeed, might have to be approved by a committee of the remaining board that had very limited historical ties to Wilan. If our new CEO then gave it the thumbs up I

[onlygame]

" If our new CEO then gave it the thumbs up I suppose I'd be fine with it, in principle. Even then, regulators or the TSE might still have concerns. " and I believe the regulators definitely would have a problem with that. I'm trying to remember a case similar and not too long ago where the company got sued for not opening up the bid process to potentially higher outside offers

[byloselhir]

I believe you stated you were in the stock just for the Apple settlement then changed your mind, say you are correct and it hits $4.50 you sell out or hold?

[cabbieJBJ]

byloselhir, I think you have me confused with Wilander.