Q: Given the poor performance of this Brookfield subsidiary since the spinoff do you see the possibility of BN taking it private as they did with Brookfield Properties? I believe BN felt that Brookfield Properties was not valued correctly by the market and saw an opportunity to take it back in house. Could the same scenario play out with BBUC? Thanks for the great service that you provide.
5i Research Answer:
Given BN’s track record of being run by one of the most shareholder-friendly management teams, they certainly could do so if shares are trading at a significant discount compared to distributable earnings. Having said that, at the current level, they may prioritize acquiring other assets at a distressed level, and also although we believe BN’s management would act in the best interest of shareholders, and the timing of it is uncertain. So, while certainly possible, we would not really expect this and would not own it JUST on this possibility. But BBUC is very cheap, and kind of flat-lining in the market. But it is also fairly small and we do think BN has bigger fish to fry right now.