AGT going private

[bucket]

Harper did away with the grain commission....Trudeau will finish the rest with this royalty scheme....

[Marusko]

so hows is it that a company bleeding losses for as long as they have have a CEO that can buy the company to go private?

AS a CEO ...Katib doesn't earn enough to put that kind of money away without a healthy income tax bill....

I was wondering this too, so your comment inspired me to look into it. From an article released at the time of the announcement. Bear with me cause some of this I'm learning about as I go along.

The Management Group that proposed the takeover (currently owning 17% of shares) would get financing from Fairfax Financial Holdings, an investment company that has its own shares in AGT already. Fairfax itself owns just 0.75% shares directly.

But there's more to it than that.

Fairfax also holds about 5.7 million share purchase warrants, which they got in exchange for purchasing 'interest bearing securities' to the tune of $190 million (this as I understand it is essentially a loan) which matures in 99 years. from a closing date of Jan 1, 2018.

Warrants seem to be like stock options, except new shares are created when the warrants are exercised, so if Fairfax was to exercise the warrant, the money they pay for the shares goes directly into AGT, it wouldn't buy existing shares from another shareholder.

The warrants are valued at $33.25 per share and expire after 7 years, When the deal was announced on Aug 31, 2017, shares were worth about $24 each. Now they are under $18.

If they exercised those warrants, they would own 19% of the company. (but of course paying nearly double what the share price currently is.)

So, derive from that what you will. Seems to me that they are looking at their warrants that are worthless because the open market deems AGT shares to be worth half of what the warrants cost them, so they're making moves to take AGT private where things like share price are a lot more "flexible". But what do I know, I'm just a farmer.

My sources:

https://www.newswire.ca/news-releases/agt-food-and-ingredients-announces-receipt-of-a-proposal-to-effect-a-management-buyout-689235641.html

http://www.agtfoods.com/download/456

[bucket]

He has been hiding /squirrelling money away from the shareholders for years....not sure how no one has caught it although one analysts did and Katib laughed it off....not funny to shareholders watching their value disappear with no real dividends...

but where does a guy get off on offering to buy his own company and writing his own break fee....

I guess the 100 million from trudeau didnt hurt that bad to fix a rail line in 3 months that omnitrax couldn't do in 2 years.

[Marusko]

He has been hiding /squirrelling money away from the shareholders for years....not sure how no one has caught it although one analysts did and Katib laughed it off....not funny to shareholders watching their value disappear with no real dividends...

but where does a guy get off on offering to buy his own company and writing his own break fee....

I guess the 100 million from trudeau didnt hurt that bad to fix a rail line in 3 months that omnitrax couldn't do in 2 years.

I don't know how that break fee is even legitimate.

This is from August:

https://www.producer.com/2018/08/investor-firm-rejects-agt-purchase-offer/

Wonder what they think now

[LEP]

Not defending Katib, but the break fee is to cover part of the costs to put together the financing. Fairfax would get a hefty fee to look at the deal and probably even more if it proceeds. It won't go to pad his bank account.

The reason he is going private is because the shares are undervalued in his opinion which likely puts him in breach of his lending covenants with current lenders. If his current package was put in place when the share price was much higher his debt to equity would be off. I have talked to several people who went public and regretted it exactly because of the way the market doesn't value potential as much as steady results every quarter. Small business rarely works that way.

[bucket]

Not defending Katib, but the break fee is to cover part of the costs to put together the financing. Fairfax would get a hefty fee to look at the deal and probably even more if it proceeds. It won't go to pad his bank account.

The reason he is going private is because the shares are undervalued in his opinion which likely puts him in breach of his lending covenants with current lenders. If his current package was put in place when the share price was much higher his debt to equity would be off. I have talked to several people who went public and regretted it exactly because of the way the market doesn't value potential as much as steady results every quarter. Small business rarely works that way.

His shares are undervalued because when they phone me to ask if I am interested in doing business and their price is the same as Richardson or viterra but want me to finance him for 3 weeks ....as far as being businessman of the world. ....it don't matter he's not getting my product....


BTW neither does viterra because I can't leave with a scale ticket....

But AGT in the last three weeks has seen a 1.20 a bushel increase on their inventory. ...some invested in them might start to ask questions ...

When they called me they were at 17.5 on reds. ...had I sold by the time I delivered it would have been 18.5......

I don't need assholes calling me and not answering truthfully about the outlook on price....


I already pay a checkoff for that kind of misinformation or lack of new information.

AGT doesn't portray itself as a small business....billions in sales ...very little profit. ...and a constant intravenous of government money and photo ops.....