Q: Ewing Morris has increased its all cash offer to $4.10 from $3.85. Conditions apply. The initial offer and now the increase raises questions that I can not really even guess at figuring out. While that may be the same for you I am asking for your comments on the initial offer and now the increase to $4.10. I lean towards accepting the offer as I have a significant holding but also a huge capital gain. Btb.un is trading at $3.85 today so not that close to $4.10 in my opinion and that seems like a reluctance on the part of buyers to see this offer as a done deal. Of course there is the 8 million limit. Thank you for your comments.
5i Research Answer:
The board has sat on the fence here and has made no recommendation to shareholders. The discount reflects that it is not an offer for all units and we would not necessarily see it as reluctance. We would not be that interested in tendering, at least so close to year end (investors could sell in January and defer tax). We do not necessarily see units dropping in value after the bid expires. Units are cheap, the yield is 7.77% and lower interest rates could be positive. There is a reason EW wants to own 10% here, and we would agree with them that there is still potential here.