Author Topic: SNC - SNC-Lavalin Group  (Read 11146 times)

gurpaul88

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Re: SNC - SNC-Lavalin Group
« Reply #10 on: June 03, 2015, 07:02:18 AM »


SNC is a steal...i would be very surprised if Mr. Buffett is not kicking their tires. do your homework on the 407 it's worth $3 billion plus as it is one of the great global investments...a bribe in Libya really? Do you think the Canadian government would jeopardize the best paying jobs and tax revenue of Canadian giant around since 1911? they will pay a fine.

Dazel

Curious on what you think the company is worth.


Pelagic

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Re: SNC - SNC-Lavalin Group
« Reply #11 on: June 03, 2015, 07:34:59 AM »


SNC is a steal...i would be very surprised if Mr. Buffett is not kicking their tires. do your homework on the 407 it's worth $3 billion plus as it is one of the great global investments...a bribe in Libya really? Do you think the Canadian government would jeopardize the best paying jobs and tax revenue of Canadian giant around since 1911? they will pay a fine.

Dazel

Good call, while not Buffett it looks like other E&C firms are kicking the tires.

http://seekingalpha.com/news/2559456-fp-buyers-targeting-snc-lavalin-with-takeover-ambitions

Dazel

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Re: SNC - SNC-Lavalin Group
« Reply #12 on: June 03, 2015, 07:35:12 AM »
SNC sold Alta link to Mr. Buffett last year for $3.1 b...I am miffed by the fact he did not buy the whole company at that time...As the 407 is exactly the kind of asset he covets...back out the 407 and other investments...and the $1b in cash...their new business additions  are in oil and gas big in saudi Arabia...they have won two major contracts in Canada in the last two months...the Champlain bridge is worth around $4b.

$12b in back log on $9b rev's for $3b market cap when you back out 407 after tax, cash-non recourse debt, and other infrastructure investments.
simple addition...i like simple addition.

Mr. Buffett should buy the whole thing. their energy and power assets investments  and ability to build manage and monetize projects fit well with mid American which they have a relationship since the Alta link deal closed..

but shareholders will make more if it is split up which is what is happening now...its a win win for shareholders.

After i posted there was an article in Financial Post that firms were circling SNC...these are apparently engineering firms...

disclaimer: i own it and am still buying...not happy with the jump here.

Dazel

Dazel

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Re: SNC - SNC-Lavalin Group
« Reply #13 on: June 03, 2015, 09:50:05 AM »
http://www.bloomberg.com/news/articles/2015-06-03/snc-rises-to-highest-since-november-on-report-of-buyout-interest?cmpid=yhoo

This article is somewhat correct and that is why Berkshire would be one of the only fits to take over SNC as he would leave the Quebec headquarters...Power Corp would be the other...its a short list. The other problem for anyone trying to steal it is that the majority owner Jarislowsky Fraser (Stephen Jarislowsky) is one of the greatest value investors of all time

http://moneyweek.com/stephen-jarislowsky-the-canadian-warren-buffett/

This is an old article...but gives you an idea of the man. He has stepped down from the helm since 2012 but make no mistake SNC-Lavalin is still Jarislowsky's baby. It's a great company that is on sale...

the best thing for shareholders is for them to continue down the path they are headed (deal with Canadian gov and sale of 407-or not it is a great asset)...a take over would undervalue what will become of SNC-Lavalin but you can be sure that Jarislowsky will not let it go cheap.

Dazel

LesPaul

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Re: SNC - SNC-Lavalin Group
« Reply #14 on: July 06, 2015, 10:40:08 AM »
Seems like this action was almost directly taken for SNC:

http://www.montrealgazette.com/business/Ottawa+softens+anticorruption+rules+companies+seeking+government+work/11191755/story.html

MONTREAL - Ottawa has softened its anti-corruption rules, reducing the penalties for companies that are seeking government work after being convicted of bribery, money laundering and other offences.

Under the new procurement rules announced Friday, companies can still be barred from government contracts for 10 years if they have been convicted of such offences in the past three years.

But that ban can be cut in half if the company co-operates with authorities and takes remedial action.

Also, suppliers will no longer be automatically ineligible for government work because of the conduct of affiliates unless it can be demonstrated that the supplier had control over the convicted affiliate.

Canada's business lobby has been urging Ottawa to make changes to procurement rules it labelled as "draconian."

Public Works Canada says the new rules are fair, ensure due process and better align with international best practices.

SNC-Lavalin chief executive Robert Card has warned of the negative consequences for his company if the federal protocols used in awarding contracts weren't changed in light of the company's legal troubles. The company has been beefing up its compliance rules since improprieties surfaced three years ago.

The RCMP charged SNC-Lavalin (TSX:SNC) and two of its subsidiaries with one count of fraud and one of corruption last February over its dealings in Libya.

The Montreal-based company has said it will plead not guilty to the charges but is willing to pay a fine for the alleged transgressions of former employees. The case will be back in court in October.

While the legal case remains outstanding, SNC-Lavalin has been part of various consortia that have won or been selected as preferred bidders for several federal contracts.

Analyst Maxim Sytchev of Dundee Capital Markets says SNC-Lavalin isn't "entirely out of the legal woods," but the shorter debarment times and reinstatement opportunities is positive for the company.

Cardboard

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Re: SNC - SNC-Lavalin Group
« Reply #15 on: October 01, 2015, 08:46:18 PM »
http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aSNC-2314781&symbol=SNC&region=C

Is the $600 million price tag a negotiated amount or a put amount that was agreed at the signature of the joint venture between partners years ago?

Cardboard

Studesy

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Re: SNC - SNC-Lavalin Group
« Reply #16 on: January 28, 2019, 11:49:00 AM »
Last year an announcement was released by SNC stating they may sell 6.7% of their hwy 407 stake (out of their 16% holding).  Analysts pegged a $2+bil valuation on this 6.7% stake. 

At a $2b valuation, this implies a $5b valuation on their entire 407 stake.
At a $2.5b valuation, this implies a $6.2b valuation on entire stake.

SNC market cap today= $6.1b

After today's announcement and subsequent price decline, it seems the E&C division is priced for death.   

rb

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Re: SNC - SNC-Lavalin Group
« Reply #17 on: January 28, 2019, 12:52:14 PM »
I like 407 a lot. But that valuation is a bit out to lunch.

Studesy

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Re: SNC - SNC-Lavalin Group
« Reply #18 on: January 28, 2019, 06:47:25 PM »
I like 407 a lot. But that valuation is a bit out to lunch.

What do you think it is worth?


This article is from 2017. Seems $4.5 b +  was the concensus then.
https://business.financialpost.com/investing/highway-407-could-be-worth-up-to-45b-in-a-decade-and-thats-good-news-for-snc-lavalin

Cheers

rb

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Re: SNC - SNC-Lavalin Group
« Reply #19 on: January 28, 2019, 08:35:34 PM »
I don't concern myself much with the consensus. I prefer to do my own work.

In 2017 their free cash was lets say maybe $567 million. The road is probably worth around 24 times that. So $13.6 billion. SNC I think owns 16.7% of it. So SNC's share is $2.27 billion. I think 2018 free cash should decline because I think their tax rate will go up. Maybe due to my nature I'm a little stingy, but 13.6 is a long way from 45.

Furthermore, while I do like 407, some warts are starting to pop up. Most of their growth was price, not traffic. Very profitable growth. But they're starting to bump into the limits of that. So there won't be as much price taking in the future - a combination of government and technology. I say this as someone who's a frequent user and who's family is a frequent user.

I should add that I did own SNC in the past. Bought it somewhere below the current price during the bribery scandal and I did very well. But back then it was the 407 stake + Altalink + the E&C and other. Now they've sold Altalink and did an acquisition with the money. An acquisition on which they're taking a huge write-off now. Plus the bribery thing still lingers on. Without Alatalink I don't think the 407 stake is enough cushion against management stupidity. If you like 407 at this point I'd suggest taking a good look at Ferrovial. They're a much more competent bunch than the SNC guys.