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Chris DeMuth Jr.
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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... 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.

    Themes: squeeze outs
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Comments (7)
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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, 09:12 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4245) | 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, 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, 09:12 PM Reply Like
  • Ruerd Heeg
    , contributor
    Comments (556) | 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:
    http://seekingalpha.co...

     

    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, 08:10 AM Reply Like
  • Ruerd Heeg
    , contributor
    Comments (556) | 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, 03:52 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4245) | Send Message
     
    Author’s reply » +6.3% so far: http://bit.ly/1lKZqjB.
    18 Mar, 11:25 AM Reply Like
  • TMFDeej
    , contributor
    Comments (81) | 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

     

    http://on.mktw.net/O9asD8

     

    Jason
    31 Mar, 02:37 PM Reply Like
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