Two going private offers in the same day!
Aimia (TSX: AIM) – a company I have written about here many times before in the past – is receiving a $3.66/share cash offer from its 30% shareholder, Mithaq Capital.
Needless to say it is terrible to be a shareholder of Aimia – do you take the $3.66 sure bet and cash yourself out at under 40% of book value (albeit dropping despite them having invested a ton of money into two private businesses) or do you hold on and put up with the completely sub-standard management that could have done far better by just sticking their money into an S&P 500 index fund? Tough decision.
One thing I do know – part of Aimia’s value proposition is its $269 million in capital losses that has accumulated since June 30, 2023. If this buyout does proceed, Aimia will not be able to utilize this. That said, glossing over their portfolio, I’m not sure how much in the way of capital gains management could realize going forward, so perhaps it doesn’t matter.
The only question I would have is for those preferred shareholders – they are very illiquid and are trading at around 12% yields at the rate-reset assuming the 5-year government bond trades as it is today.
Any rate resets that you like today?
This company was the poster child for the category I think of as “catnip for smart contrarians” (at various times, this category has included KFS, OSTK, LYLT and many others). It had it all: hidden assets, boardroom drama, involvement of alleged value geniuses, NOLs, on and on: everything that seemed to promise a reward for the extra work of creating a SOTP and for thinking differently from the purported crowd. Every year that reward was a year away, two at most. There are so many ways to make money in the market; there are so many ways not to make any, too.
Aimia management doing Aimia management things:
– Aimia Inc. a holding company focused on long-term global investments, announced today a strategic investment of up to 10,475,000 Aimia common shares together with up to 10,475,000 Common Share purchase warrants in a private placement
There was a lot of money spent buying back shares at much higher prices.
OMG. Talk about poisoning the well with a 24.9% (i.e. no shareholder approval) secondary offering!!!
I am absolutely sure the $30 million or so in net proceeds will be most wisely invested!
I must say, for being a non-shareholder and not in any way considering an investment in its current incarnation, Aimia has my full and complete attention, for all the wrong reasons.
https://www.capitalmarketstribunal.ca/en/proceedings/mithaq-canada-inc-re More Drama here!