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Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
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  • Squeeze Out Forum 7 comments
    Feb 24, 2014 12:24 PM

    Majority owners of publicly traded companies can frequently take out costs and reduce disclosure requirements by squeezing out the minority holders. Additionally, they can be somewhat price-insensitive because the buyers are on both sides of the table and do not always want to get the lowest possible price. What publicly traded subsidiaries or other companies with majority owners make for good investments? Here are some of my ideas. What are yours? Please comment below.

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  • events-and-situations
    , contributor
    Comments (2) | Send Message
    NATL's gotten a lot of press recently, but I haven't had the chance to dig into the situation beyond generally keeping up w/the news.


    Has anyone done any real digging, esp. on Ohio corporate law?


    If not, I'm hoping to do so this weekend.
    26 Feb 2014, 09:12 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11443) | Send Message
    Author’s reply » Yes, I have spent a good bit of time working on this. It was a terrible process, but OH corporate law is terrible too so looks fairly hopeless to me. Were it in DE, I'd buy five or ten percent of NATL and sue. But in OH, I'm not touching it. Maybe the holders decide against tendering. But I have no position and will re-examine it if it breaks. Others?
    27 Feb 2014, 06:07 AM Reply Like
  • events-and-situations
    , contributor
    Comments (2) | Send Message
    Yes, winning in the Chancery would be a slam dunk. Q in Ohio is what background case law, etc., say, because there aren't any statutory safeguards that'll protect minority shareholders. Presumably, politics could matter, too: if the law is vague, or isn't well-established, it's hard to imagine that Ohio courts would want to establish precedent allowing this sort of process. But who knows?


    FWIW, T. Rowe Price and the founder have refused to tender, but . . . once again, I haven't had time to do any real digging.
    27 Feb 2014, 09:12 PM Reply Like
  • Ruerd Heeg
    , contributor
    Comments (1311) | Send Message
    Thanks for your opinion on NATL. At the moment it's trading above the offer price, so I suppose shareholders won't tender?


    Any squeeze out trading far below NCAV might have chances to be blocked in court.


    Though the buyers group only has 34% an example would be CIS, see my latest article:


    Even including one more year of heavy future losses CIS trades below NCAV. The court that can stop this would be in the British Virgin Islands.
    27 Feb 2014, 08:10 AM Reply Like
  • Ruerd Heeg
    , contributor
    Comments (1311) | Send Message
    ITSI is a squeeze out, the majority owner is trying to buy it for $1.33. Very small company. ITSI mostly depends on sales order from the owner. So the owner wants to buy the shares before placing a huge order. Is it possible to get a higher offer than $1.33?
    7 Mar 2014, 03:52 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11443) | Send Message
    Author’s reply » +6.3% so far:
    18 Mar 2014, 11:25 AM Reply Like
  • Special Situation News
    , contributor
    Comments (297) | Send Message
    Hi Chris. I wasn't sure which one of your discussions the merger of Class A & B shares would fit into, but this looks about right. There's still a little meat left on this bone.


    Major Shareholder of Tecumseh Products Announces Intention to Vote FOR the Proposal to Combine the Company's Class A and Class B Common Shares



    31 Mar 2014, 02:37 PM Reply Like
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