Tag: DHX

TSX Exchange-traded debt review

I have made some corrections to my initial TSX Exchange-traded debt spreadsheet. So far, this is turning out to be a great replacement for the old one that used to be at the old Financial Post website before it got taken down.

In terms of valuations, none of them appear to be errantly priced where I am tempted to dive in. The ones trading well under par are either visibly insolvent or marijuana companies. In either instance, purchasers of the debentures are likely to lose capital. The best of the worst of them appear to be DHX Media (TSX: DHX.DB) and Just Energy (TSX: JE.DB.C/D) but both of these businesses have issues which make the double-digit YTM warranted.

If your goal with these instruments is to make a relatively easy 5%, however, there are plenty of quality selections to be made, although I’d make the argument that for a non-tax sheltered account you would be much better off with preferred shares.

DHX Media

Apparently in India it is not illegal to send unsolicited bids to North American publicly traded companies to spur liquidity that enables you to get out of your own large net loss positions in said firms:

Sakthi Global Holdings, OTC MARKETS has announced that it has submitted an unsolicited Merger Proposal to DHX Media offering Shareholders of DHX Media $5.32 per share upon the completion of a Merger of Sakthi Global Holdings and DHX Media the $5.32 per share payable to DHX Media Shareholders will be comprised of $1.32 per share in cash and $4.00 Per Share in common stock of the merged entity, with Sakthi Global shareholders emerging as the majority shares holders of the combined companies. The merger offer is contingent upon 80 per cent of the shareholders of DHX Media accepting the offer and voting in favour of the Merger at Special Meeting of Shareholders to be convened for the purpose of voting on the proposal made by Sakthi Global Holdings Limited

I believe the (TSX: DHX) DHX board of investors are waiting for the unsolicited bid to come through international Canada Post, but the package has been held up in customs, and will take about 3 months to clear before they will be able to formally look at it.

On a more serious note, before this I was looking at the DHX debentures (TSX: DHX.DB) in early May and passed on it, although I’ll add that this is getting to the point of being an interesting speculative instrument if it goes any lower – the valuation of intellectual property works such as Peanuts (the Charlie Brown franchise which they dumped a 39% stake in to Sony Japan) for $234 million in July 2018 was a pretty good sale. For those that were ever interested in speculating on the value of artwork and the public’s institutional memory, this is a reasonably close proxy. Somehow I don’t think the names of Teletubbies (which causes mental erosion in children) or Strawberry Shortcake will fetch nearly as much, but I think Inspector Gadget in the right hands could make a comeback!