Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 123464 times)

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #510 on: March 14, 2019, 10:31:55 AM »
They have various alternatives...

Cash bid for all of the E pref's at $17.50 would cost them $63mm cash. Use bank line & some cash from current holdings.
Put forward an extension of the E's by a year or more
Some combination of cash & common or other prefs to settle the E's

Seems ridiculous to redeem them for common when the potential dilution is so high - believe this is only a bargaining tactic. Especially when they have $160mm in value sitting in DPM shares.

My NAV calc right now ranges from $3.38/share to $5.00/share with the $3.38 valuing all prefs at par & the $5.00/share NAV taking current market prices for all prefs. This NAV assigns $0 value to the Parq development.

Cash at the end of Sep was $26mm and they received $14.5mm from Union, $24 from Dundee Securities and probably burnt about $20mm in G&A and the pref dividends. So current cash absent other asset sales should be around $40mm.


bskptkl

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #511 on: March 14, 2019, 11:58:14 AM »
I own both preferreds and common - so take this the right way. Can someone remind me of the last smart thing these guys have done? I know Ned has done some smart things going way back. I'm talking about  the last few years.

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #512 on: March 14, 2019, 12:39:45 PM »
I own both preferreds and common - so take this the right way. Can someone remind me of the last smart thing these guys have done? I know Ned has done some smart things going way back. I'm talking about  the last few years.

Not much but holding onto DPM and undertaking the process to simplify the conglomerate are steps in the right direction.

gokou3

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #513 on: March 14, 2019, 03:10:08 PM »
They have various alternatives...

Cash bid for all of the E pref's at $17.50 would cost them $63mm cash. Use bank line & some cash from current holdings.
Put forward an extension of the E's by a year or more
Some combination of cash & common or other prefs to settle the E's

Seems ridiculous to redeem them for common when the potential dilution is so high - believe this is only a bargaining tactic. Especially when they have $160mm in value sitting in DPM shares.

My NAV calc right now ranges from $3.38/share to $5.00/share with the $3.38 valuing all prefs at par & the $5.00/share NAV taking current market prices for all prefs. This NAV assigns $0 value to the Parq development.

Cash at the end of Sep was $26mm and they received $14.5mm from Union, $24 from Dundee Securities and probably burnt about $20mm in G&A and the pref dividends. So current cash absent other asset sales should be around $40mm.

(Putting myself into Goodman's shoes)
"So let's see, should I screw the common shareholders (which my family owns 20% of) or the Series 5 holders?  Of course the Series 5 guys.  Why not give the patsies a stick and a carrot - they can either...

1) convert their series 5 shares for commons per prospectus and get a 32% immediate haircut (based on today's DC.A closing price, without assuming further price pressure from such event), or...

or

2) convert to the "Series 6" preferred with a 2022 maturity at 7.5% dividend rate, AND A PAR VALUE OF $20.  This would be a lesser 20% haircut, and will almost make the holder whole 3 years later after dividends.  Also, this offer would be a 10%+ premium to the current Series 5 prices to encourage the new-ish shareholders and arbitrageurs to bite.  This also eliminates $16M of liability in one stroke without any dilution."


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I think the "series 6 conversion" scenario is quite likely. Of course, I am biased as a Series 2 & 3 pref holder.

bizaro86

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #514 on: March 15, 2019, 08:18:06 AM »
Yeah, I can't see any reasons why the Goodmans would choose to pay in cash and in full. I think the most likely scenario is they offer some sort of haircut (either cash or new paper) and a conversion to common for those who don't take it. That will hurt the common short term, making the conversion even more attractive.