Author Topic: ELF.TO - E-L Financial Corp. Ltd.  (Read 61720 times)

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #160 on: December 04, 2019, 10:12:13 AM »
< In a typical corporate estate freeze, the owner of the common shares of the company will exchange those shares for fixed value preferred shares. By making the appropriate elections under the Income Tax Act, the exchange of the shares will not be taxed until the freezer dies. New common shares (and the eventual tax on future growth in value) will be issued to the freezer’s children or grandchildren> 

above from posted address that  Cigarbutt posted.

it would seem from my limited knowledge that if jackson has indeed frozen assets per buying preferred(of which he appears to have done quite a lot of lately) and if the amount is indeed frozen it would possibly behoove the heirs to get the value of ELF closer to its fair value whereby the future taxable value may be less once it comes into their possession versus the much discounted value of present.

If I understand you correctly that would mean paying more tax now and thus getting less inheritance to compound over time, wouldn’t it?

I think they used the 97-other code since the preferreds seem to be moving from one hold co Or trust he controls to another.
Top 5 positions: ATTO.N ELF.TO TII.V GCM.NT/GCM.WT.B PIF.TO


mjm

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #161 on: December 04, 2019, 11:01:37 AM »
possibly i do not understand this freezer law, but if Jackson exchanged common for preferred stock set in value and upon death common shares are issued to the heirs ( assuming a convertible preferred?) and the basis of the stock for the heirs is at a higher price that is closer to NAV, would that not be to the heirs benefit?  I have no idea if the stock basis gets bumped up to market value, but that is what I am basing this on. i may not be expressing myself very well so please be patient.

Cigarbutt

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #162 on: December 04, 2019, 11:30:30 AM »
^The fiscal setup is probably very complex and sophisticated.
1-The "97-other" code is simply a code different from the typical "10" you would put on the insider trading form and which includes situations where the security is bought through a trust, a private holding or for a separately managed account.
https://www.sedi.ca/sedi/new_help/english/public/Glossary/Nature_of_transaction_codes.htm
2-You have to differentiate the preferred securities that were issued by ELF or any other related public issuers from the preferred securities that would be issued privately in relation to a re-arranged capital structure of a trust or private holding in the context of an estate freeze, a holding which, itself, would own various securities (common, preferred or whatever public or private). The estate freeze is a private transaction that results in 1-the preferred shares being freezed (tax point of view) and being linked to a fixed income with the owner/founder and 2-common shares that "belong" to the next generation(s). The freeze can be flexible and dynamic but the complexity may give rise to a certain level of confusion with the notion of control.
Take the following:
-from last proxy, when the main table seems to indicate that insiders own very little. From the footnote:
"Companies in which The Hon. Henry N.R. Jackman has an indirect interest, control, in the aggregate, 2,926,009 or 72.8% of the outstanding Common Shares of the Company. Although The Hon. Henry N.R. Jackman is associated with some of these companies, he does not control any of them and, accordingly, does not have beneficial ownership of the Common Shares of the Company held by them."
So, does he control or not?
-from the last annual report, under the related parties section:
"The Company has investments in related parties which includes investments in associates of $334,913 (2017 - $330,050) and investments in other related parties within investments - corporate of $785,176 (2017 - $853,707). The ultimate controlling party of the Company and these related parties, is The Honourable Henry N.R. Jackman together with a trust created in 1969 by his father, Henry R. Jackman."
So, the ultimate control is with the Honourable but how this is defined is certainly more clearly defined in other documents.
3-For clarity, I assume that the set up is legal but wonder if the family trusts and various private holdings do not aim, at least in part, to explore the limits of fiscal constraints. The other day, I was discussing with somebody who had to complete due diligence in a certain Mediterranean country in order to arrange financing for a specific transaction. There was some difficulty with some numbers. After some resistance, the counterparty offered the following remark: "So, which financial statements do you want? the public ones? the banker ones? the tax ones? or the family ones? Again for clarity, I'm not suggesting something illegal but the setup is likely to be VERY complicated and likely contains an off-shore theme.

mjm

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #163 on: December 04, 2019, 12:12:31 PM »
 thanks for reply.  maybe i should just listen. :-)

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #164 on: December 07, 2019, 06:59:06 AM »
More size insider buying but through private trades.

24,100 shares in total from one of the holding companies and Mr. Jackman.

Volume was big (for ELF) on Friday as well but not clear if that was insider activity as well.


https://www.canadianinsider.com/company?ticker=ELF
Top 5 positions: ATTO.N ELF.TO TII.V GCM.NT/GCM.WT.B PIF.TO

Philbert77

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #165 on: December 07, 2019, 09:57:34 AM »
I have a question. Does anyone know or can speculate why Hal Jackman would be purchasing the preferred shares? How would that benefit him versus purchasing the common shares?

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #166 on: December 07, 2019, 03:23:45 PM »
I have a question. Does anyone know or can speculate why Hal Jackman would be purchasing the preferred shares? How would that benefit him versus purchasing the common shares?

I assume it’s just because he wants more income and he knows it’s “risk free” versus the actual risk free rate. The after tax advantage on that income is pretty huge.

Just a guess though.
Top 5 positions: ATTO.N ELF.TO TII.V GCM.NT/GCM.WT.B PIF.TO

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #167 on: February 27, 2020, 05:30:41 AM »
Big earnings from Empire Life yesterday on some assumption changes. They also paid out a big dividend to ELF.

NAV should be up strong when ELF reports, making the NAV discount even bigger.

https://www.newswire.ca/news-releases/empire-life-reports-fourth-quarter-and-full-year-2019-results-884996343.html

https://www.newswire.ca/news-releases/empire-life-announces-q4-2019-and-additional-dividends-807798210.html
Top 5 positions: ATTO.N ELF.TO TII.V GCM.NT/GCM.WT.B PIF.TO

StubbleJumper

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #168 on: February 27, 2020, 05:41:44 AM »
I just pulled up the US fixed income rates from Bloomberg a few minutes ago.  If rates keep falling, it won't be long before insurance companies will be better off keeping their reserves under the CEO's mattress.  It's a bit of a tough environment for a lifeco.


SJ

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #169 on: March 03, 2020, 11:35:34 AM »
Q4 results are out.

Highlights are:

- NAV is up to $1486 (up from $1421 at 9/30/20)
- special dividend of $25 on top of regular dividend of $1.25

https://www.newswire.ca/news-releases/e-l-financial-corporation-limited-announces-december-31-2019-financial-results-883064054.html
Top 5 positions: ATTO.N ELF.TO TII.V GCM.NT/GCM.WT.B PIF.TO