You are also relying upon the beneficence of a super-majority Chinese owner (80%) , who would have considerable latitude on self-dealing , management charges property transactions and the like. All this would take place outside the U.S. legal system with indeterminate local protections and too small a float to justify much in the way of minority self-protection . Maybe it's OK. Sounds appropriately discounted to me.
I did mention the possibility of the take-over attempt by Aier. It's a risk, though they would have to offer an appropriate premium. The two investment funds that own 15% are sophisticated and would not be bullied into selling. Generally speaking, the legal systems of Western European countries offer reasonable protections for minority shareholders.
In Spain should be careful with this kind of situations. Look for the "Baron de Ley" case, with some funds with position. It was ridiculous that the regulator allowed what happened. I copy a link explaining:
Juan, I read your link (via translator). I think it proves Dave's point. All the sellers sold their shares because they could not sit on a non-traded stock - but they sold voluntarily. For a Delaware corporation, the end game is the appraisal rights process if the majority tries to buyout the minority (not sure how this works in Europe). Case in point (American version) is Western Capital Resources (selling at $5.00 on the expert market...about 1/3 of my estimated intrinsic value). They recently delisted and I have no expectation that I will sell for years (could be in my will for all i know). But in 10 years, there is a good chance intrinsic value will be $50/share and at some point, the majority owner (Blackstreet I think) may want to monetize. But I think there is margin of safety in having 10 or so of these stocks purchased at a 50% plus discount...some will crash, but there will be 10 baggers along the way (EACO is 4 bagger for me now)...only a 2% float). However, Europe is deep water for me. So I am out....but totally agree with Dave's thesis.
Hi Dave, thanks for sharing. Do you have the financials since its IPO? The links on the website are broken. Do you expect some cyclicality? Just seeing the stock perf in 2007-2008, as well as Seeking Alpha writeups on LCAV, a former laser eye surgeon in the US.
What do you think may be the reasons to leave just 5% of shares in public hands and not to take the company private?? Specifically taking into account the costs, control and administrative burdens that public companies bear.
You are also relying upon the beneficence of a super-majority Chinese owner (80%) , who would have considerable latitude on self-dealing , management charges property transactions and the like. All this would take place outside the U.S. legal system with indeterminate local protections and too small a float to justify much in the way of minority self-protection . Maybe it's OK. Sounds appropriately discounted to me.
I did mention the possibility of the take-over attempt by Aier. It's a risk, though they would have to offer an appropriate premium. The two investment funds that own 15% are sophisticated and would not be bullied into selling. Generally speaking, the legal systems of Western European countries offer reasonable protections for minority shareholders.
In Spain should be careful with this kind of situations. Look for the "Baron de Ley" case, with some funds with position. It was ridiculous that the regulator allowed what happened. I copy a link explaining:
https://blogs.elconfidencial.com/mercados/rumbo-inversor/2020-07-23/baron-ley-control-cotizadas-ley-opas_2692484/
Juan, I read your link (via translator). I think it proves Dave's point. All the sellers sold their shares because they could not sit on a non-traded stock - but they sold voluntarily. For a Delaware corporation, the end game is the appraisal rights process if the majority tries to buyout the minority (not sure how this works in Europe). Case in point (American version) is Western Capital Resources (selling at $5.00 on the expert market...about 1/3 of my estimated intrinsic value). They recently delisted and I have no expectation that I will sell for years (could be in my will for all i know). But in 10 years, there is a good chance intrinsic value will be $50/share and at some point, the majority owner (Blackstreet I think) may want to monetize. But I think there is margin of safety in having 10 or so of these stocks purchased at a 50% plus discount...some will crash, but there will be 10 baggers along the way (EACO is 4 bagger for me now)...only a 2% float). However, Europe is deep water for me. So I am out....but totally agree with Dave's thesis.
Sky New Zealand is a great example of illiquidity as well. Decent company, incredibly cheap, but also very illiquid. It pays a decent dividend.
Nice idea, thank you for sharing. Were you able to find the full financials statements in English?
Here: https://www.grupobaviera.es/accionistas-inversores/?lang=en
Why did AIER never complete the purchase and stop at 80%?
Interesting idea - how do we buy the shares (ie via which broker) ?
Hi Dave, thanks for sharing. Do you have the financials since its IPO? The links on the website are broken. Do you expect some cyclicality? Just seeing the stock perf in 2007-2008, as well as Seeking Alpha writeups on LCAV, a former laser eye surgeon in the US.
Really interesting company!!
What do you think may be the reasons to leave just 5% of shares in public hands and not to take the company private?? Specifically taking into account the costs, control and administrative burdens that public companies bear.