Author Topic: zenith  (Read 18562 times)

Uccmal

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Re: zenith
« Reply #10 on: February 01, 2010, 01:30:37 PM »
I would think that they will just continue to buy it in the open market as Cardboard has suggested for now.  It will be alot cheaper to buy in a few hundred million in a year or two than 1 billion right now.  

One hopes that they are spending some of the surplus above their surplus on buying back their own shares now that they have reached somewhere in the range of 90-80% book value.  I am not seeing any significant impairments to book right now.  In fact I see a couple of significant additions rather than impairments (Magna, HR).  

They will also be committing some of that capital to the Brazilian, and European operations that are being developed.  
GARP tending toward value


sdev

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Re: zenith
« Reply #11 on: February 18, 2010, 05:06:29 AM »
little tidbit that came over the ransquawk news wire this morning:

Latest News: Fairfax (FRFHF) is said to near USD 1.3bln takeover of insurer Zenith (ZNT)

Christopher1

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Re: zenith
« Reply #12 on: February 18, 2010, 05:21:33 AM »

T-bone1

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Re: zenith
« Reply #13 on: February 18, 2010, 05:33:11 AM »
congratulations to any boardmembers that may have speculated on this! I was certainly in the camp that they would continue to buy in the open market . . . but as of this morning its hard not to think this was staring us in the face. FFH is gonna be a powerhouse when the insurance market turns.

T-bone1

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Re: zenith
« Reply #14 on: February 18, 2010, 06:02:51 AM »
Looks like its a done deal at $38 per share . . .

"Fairfax intends to finance the acquisition with a combination of holding company cash and subsidiary dividends, but will also raise $200 million through an equity issue prior to the closing. Following the completion of the acquisition, Fairfax expects to continue to maintain approximately $1.0 billion in cash and marketable securities at the holding company level."
« Last Edit: February 18, 2010, 06:05:23 AM by T-bone1 »

Rabbitisrich

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Re: zenith
« Reply #15 on: February 18, 2010, 06:05:15 AM »
This might put worker's compensation insurers in play, especially given the fairly low valuations of the group. I own a bit of EIG, and there has been a steady rise since last week.

Partner24

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Re: zenith
« Reply #16 on: February 18, 2010, 06:23:04 AM »
Well, suffice to say that they are investing within their circle of competence  ;)


ourkid8

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Re: zenith
« Reply #17 on: February 18, 2010, 06:38:29 AM »
I really do not like the fact that Fairfax is issuing equity in this situation considering they just recently paid a dividend which is equal to the amount of the equity issue... Dividends are paid when the company cannot find better use of the capital YET in the last 2 years there have been numerous opportunities to use that capital much more efficiently...  I understand the dividend fuels Mr. Watsa's lifestyle but that is rediciolous. 

but will also raise $200 million through an equity issue prior to the closing.

T-bone1

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Re: zenith
« Reply #18 on: February 18, 2010, 06:45:59 AM »
I'm not happy about the dividend either, but I must repeat what I have said before . . . I think people are way too hard on this company considering that FFH is run in a more shareholder friendly manner than 95-99% of the other companies out there.

Yes I am a shareholder and expect to be treated fairly, but I do not forget that Prem and everyone else at FFH is creating wealth and value for me - not the other way around!

From my understanding Prem does not lead and extravagant lifestyle by any means, and if he did I would not begrudge him that at all! If you would prefer that Prem paid himself and other insiders multi-million dollar salaries rather than pay dividends that every owner receives equally then go invest in Goldman Sachs. I don't mean this to be offensive or to start an argument, I just think that we are lucky to be able to invest in a company like FFH - not the other way around.  

Prem has said on numerous occasions that he holds all the votes, wouldn't sell-out for 4 times book and that if you don't like it don't invest.
« Last Edit: February 18, 2010, 07:43:11 AM by T-bone1 »

txlaw

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Re: zenith
« Reply #19 on: February 18, 2010, 07:28:56 AM »
impressive call viking, stubblejumper and valuecfa

I'll second that!