can you explain why Altus shares are trading around 48$ after its recent substantial issuer bid has only taken up and paid for 2,855,696 of its common shares at a price of C$57.00 per Share (total paid < 163 M). Under its substantial issuer bid, it was allowed to repurchase for cancellation a number of its Shares for an aggregate purchase price not to exceed C$350 millions at a price from 51$ to 57$. I thought that following its successful SIB, AIF shares would trade around a floor « created » by its SIB price. Also, can you explain why AIF has been willing to pay 57$ a few weeks ago, and now, it is not willing to buy back shares at a lower price with the unused cash (350 - 163 = 187 millions) still siting in its bank account? What am I missing? Should management reconsider selling the whole company? Thank you for your collaboration, Eric
It is interesting, in that not enough shares were tendered for the company to spend $350M. But regardless, since the Dutch Auction was only for about 12% of shares, investors would not necessarily pay $50+ in the market, knowing that not all shares might be taken up in a tender (even though as it turns out they were). We would expect its ongoing issuer bid to be renewed, and there is always a chance of another Dutch buyback, but we would not expect it so soon after the last one. With the stock already down 16% YTD, management surely must be disappointed in the result of the auction. Sentiment towards real estate services is not great. A sale of the company is possible, but at 20X earnings it may not have that many suitors willing to pay a big premium. We would expect management would rather wait for a recovery than sell now. With just a small dividend, investors are looking at AIF's negative 8% over the past five years and are just not excited enough to pay up for shares right now.