Empire Co. Ltd. (Symbol-EMP.A)
- scomac
- Veteran Contributor
- Posts: 7788
- Joined: 19 Feb 2005 09:47
- Location: The Gateway to Wine Country
Empire Co. Ltd. (Symbol-EMP.A)
Empire Company and Sobeys announce going private transaction.
Any lucky Sobey's shareholders out there? I own the parent, not the offspring. Still a nice pop of 7% on EMP.A as a result of taking out the minority SBY shareholders.
Any lucky Sobey's shareholders out there? I own the parent, not the offspring. Still a nice pop of 7% on EMP.A as a result of taking out the minority SBY shareholders.
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
Thomas Babington Macaulay in 1830
- bubbalouie
- Veteran Contributor
- Posts: 1431
- Joined: 04 Dec 2005 23:07
- Location: City of Chumps
- scomac
- Veteran Contributor
- Posts: 7788
- Joined: 19 Feb 2005 09:47
- Location: The Gateway to Wine Country
Not for long......esau wrote:It jumped to fourth position behind CAE , AGRIUM and C P RAIL
So how's my old friend esau doing anyway? It's been so long since we've heard from you I was beginning to think that you were lost.
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
Thomas Babington Macaulay in 1830
The grocery business is capital intensive, lacks quality management, and is caught in a never-ending spiral of price cutting. Empire already owns much of this company, so how does going private with the same owners and EXISTING management add so much value--I just don't see it.
If I were a shareholder (I used to be) I would be thrilled that someone is willing to pay such a high premium.
If I were a shareholder (I used to be) I would be thrilled that someone is willing to pay such a high premium.
scomac wrote:
Not for long...... ;)
So how's my old friend esau doing anyway? It's been so long since we've heard from you I was beginning to think that you were lost. :lol:
I'm doing well scomac thanxs, I read here often .
Sorry to loose a good business...happy with the unexpected quick gain....Kiss Kiss
where to re-deploy ?
ps. out with over 300% incl. div. FAL
E:o)
- scomac
- Veteran Contributor
- Posts: 7788
- Joined: 19 Feb 2005 09:47
- Location: The Gateway to Wine Country
Well that's always the question, eh? Call it the bittersweet side of a buy-out.esau wrote:
Sorry to loose a good business...happy with the unexpected quick gain....Kiss Kiss
where to re-deploy ?
Sure...rub it in.ps. out with over 300% incl. div. FAL
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
Thomas Babington Macaulay in 1830
Re: EMP.A - Empire Co. Ltd.
The obviously haven't thought about how this is going to be financed. I can't figure Empire out on this one. They already control SBY so why add debt or equity dilution for the remainder? Adding SBY's LT debt to EMP.A's LT debt increases EMP.A's debt by 40%. If the deal is financed by debt, EMP.A's balance sheet is going to be a great deal weaker. Aside from the debt, they'll add a fair bit of goodwill because SBY's BV is around $29-30. Between the debt and goodwill, they'll start to look more like L.scomac wrote:Still a nice pop of 7% on EMP.A as a result of taking out the minority SBY shareholders.
Empire bonds are currently rated BBB which is one notch above junk bond status.DBRS wrote:DBRS has placed the short and long-term ratings of Empire Company Limited (Empire or the Company) Under Review with Negative Implications. This action follows the joint announcement by Empire and Sobeys Inc. (Sobeys) that they have entered into an agreement pursuant to which Empire will acquire all of the outstanding common shares of Sobeys that it does not own for approximately $1.06 billion. Empire currently owns 72.1% of the issued and outstanding shares of Sobeys.
The all-cash financing of the transaction will result in a significant increase in net debt for the consolidated group. Although the Company has stated that the Empire/Sobeys business strategy is not expected to change in a meaningful way, substantially higher debt will have a significant effect on financial leverage and the overall credit risk profile of the consolidated group.
DBRS will focus on the details of the financing plan along with an update of the financial policies and business strategies of Empire/Sobeys on a go-forward basis to determine the credit impact on the respective entities and resolve the under review status.
Now here is a company who knows when to take advantage of the market and raise equity
Not too bad for dilution as I'm much more content to have it occur at a high than near a 52-week low. I won't be participating as I've recently trimmed my position due to share appreciation, but continue to hold.
The proceeds, "will be used to reduce indebtedness and for general corporate purposes."
Not too bad for dilution as I'm much more content to have it occur at a high than near a 52-week low. I won't be participating as I've recently trimmed my position due to share appreciation, but continue to hold.
The proceeds, "will be used to reduce indebtedness and for general corporate purposes."
Triage Investing Blog - A Source for Value & Dividend Investing and Business Fundamentals
Empire share sale slices 10% off price
Paying off debt always good, except for shareholders
Barry Critchley, Financial Post Published: Wednesday, April 08, 2009
If any issuer wants lessons in how to knock 10% off its share price in one day, then call Empire Co. Ltd. the Stellarton N. B.-based company whose core businesses includes food retailing and related real estate.
Paying off debt always good, except for shareholders
Barry Critchley, Financial Post Published: Wednesday, April 08, 2009
If any issuer wants lessons in how to knock 10% off its share price in one day, then call Empire Co. Ltd. the Stellarton N. B.-based company whose core businesses includes food retailing and related real estate.
As a shareholder...
Do I want management to raise equity when it needs to at a substantial discount to bookvalue?
or
Do I want management to raise equity when it can at a premium to bookvalue?
MFC & EMP.A are two completely different companies who raised equity for two entirely different reasons. This isn't a 7-10% dilution for Empire shareholders and the company has done very well to position themselves for this economic environment. Now maybe they know something we don't, but I see it as a prudent decision for the company considering they haven't raised equity in sometime, still have debt to pay off from the Sobey's purchase and could use the additional equity to gain market share.
Do I want management to raise equity when it needs to at a substantial discount to bookvalue?
or
Do I want management to raise equity when it can at a premium to bookvalue?
MFC & EMP.A are two completely different companies who raised equity for two entirely different reasons. This isn't a 7-10% dilution for Empire shareholders and the company has done very well to position themselves for this economic environment. Now maybe they know something we don't, but I see it as a prudent decision for the company considering they haven't raised equity in sometime, still have debt to pay off from the Sobey's purchase and could use the additional equity to gain market share.
Triage Investing Blog - A Source for Value & Dividend Investing and Business Fundamentals
Re: Empire Co. Ltd. (Symbol-EMP.A)
For those owners of Empire shares, of which I'm one, something to think about in regards to the competition. First Walmart, and now....
Empire Company Ltd. (EMP.A), owner of the Sobeys grocery chain, reported strong results in its core business in the fourth quarter, but its food retailing segment continues to experience intense competitive pressures in certain regions, noted Beacon Securities Ltd. analyst Philip Bassil. CIBC analyst Perry Caicco added that Target’s impending entry, which will increase food retailing square footage in Canada, will put additional pressure on the company to increase productivity and lower costs.
Empire Company Ltd. (EMP.A), owner of the Sobeys grocery chain, reported strong results in its core business in the fourth quarter, but its food retailing segment continues to experience intense competitive pressures in certain regions, noted Beacon Securities Ltd. analyst Philip Bassil. CIBC analyst Perry Caicco added that Target’s impending entry, which will increase food retailing square footage in Canada, will put additional pressure on the company to increase productivity and lower costs.
Re: Empire Co. Ltd. (Symbol-EMP.A)
With the jump in Empire shares this past few days since the Safeway Canada buyout, now I know why I diversify widely amongst Canadian dividend growth shares. I never know which are going to climb and which are going to do the opposite.
Re: Empire Co. Ltd. (Symbol-EMP.A)
Empire is the company supplying all Target's groceries in Canada. Sounds like a good hedging strategy to me.Taggart wrote:For those owners of Empire shares, of which I'm one, something to think about in regards to the competition. First Walmart, and now....
Empire Company Ltd. (EMP.A), owner of the Sobeys grocery chain, reported strong results in its core business in the fourth quarter, but its food retailing segment continues to experience intense competitive pressures in certain regions, noted Beacon Securities Ltd. analyst Philip Bassil. CIBC analyst Perry Caicco added that Target’s impending entry, which will increase food retailing square footage in Canada, will put additional pressure on the company to increase productivity and lower costs.
Regards,
Pickles
Pickles
Re: Empire Co. Ltd. (Symbol-EMP.A)
Good point. I like Empire because it's a NS company that has staged its growth prudently and skillfully. It went the REIT route long ago, and has a manageable number of grocery chains, unlike Loblaws which has so many. The flyers I get for Loblaws, Valumart and Superstore all have the same design and the same products but different prices!Taggart wrote:With the jump in Empire shares this past few days since the Safeway Canada buyout, now I know why I diversify widely amongst Canadian dividend growth shares. I never know which are going to climb and which are going to do the opposite.
Sobeys took a stand against selling the farmed salmon that had been exposed to the virus that has killed thousands of salmon. Permitting that fish to be sold for public consumption was a political move by the fisheries inspectors. Loblaws won't even tell people which salmon they sell is from the problematic farms and which comes from untainted sources.
Galen is too busy having coffee with housewives to manage a company. Four years later, the company's inventory system still isn't fixed.
Regards,
Pickles
Pickles
Re: Empire Co. Ltd. (Symbol-EMP.A)
So what you are saying is that you have to buy everything in case you miss a move.Taggart wrote:With the jump in Empire shares this past few days since the Safeway Canada buyout, now I know why I diversify widely amongst Canadian dividend growth shares. I never know which are going to climb and which are going to do the opposite.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
Re: Empire Co. Ltd. (Symbol-EMP.A)
No, but it's an extra perk I didn't foresee when I kept expanding the number of Canadian dividend growth stocks in the portfolio. Also, as a bonus I get more stocks that increase their dividends in the portfolio. Must be near twenty separate increases so far this calendar year, and we're not quite half way there yet. I do a lot of high fives.deaddog wrote:So what you are saying is that you have to buy everything in case you miss a move.Taggart wrote:With the jump in Empire shares this past few days since the Safeway Canada buyout, now I know why I diversify widely amongst Canadian dividend growth shares. I never know which are going to climb and which are going to do the opposite.
Re: Empire Co. Ltd. (Symbol-EMP.A)
Almost took a fit today as I'm updating the accounts for month end, and noticed we'd lost around $10,000 on Empire since I last checked a month ago. How do I explain to my wife that I'd lost that amount at a supermarket? Obviously, the online broker hasn't updated the accounts to reflect Empire's latest stock split. I forgot all about the split from their previous news release.
Re: Empire Co. Ltd. (Symbol-EMP.A)
Missed the boat on this stock (like Dollarama). Sobey's is a money making machine - we should know. Many, many products are smaller with higher prices recently! And they treat their employees poorly, especially part-timers.Taggart wrote:Almost took a fit today as I'm updating the accounts for month end, and noticed we'd lost around $10,000 on Empire since I last checked a month ago. How do I explain to my wife that I'd lost that amount at a supermarket? Obviously, the online broker hasn't updated the accounts to reflect Empire's latest stock split. I forgot all about the split from their previous news release.
2 yen
Re: Empire Co. Ltd. (Symbol-EMP.A)
Yes, the closest grocery store to us is Thrifty's. After Sobey's took over, product quality and service took a dive. We don't shop there anymore if we can avoid it.2 yen wrote: Missed the boat on this stock (like Dollarama). Sobey's is a money making machine - we should know. Many, many products are smaller with higher prices recently! And they treat their employees poorly, especially part-timers.
2 yen
Re: Empire Co. Ltd. (Symbol-EMP.A)
Dropped -14.72% today due to bad earnings (Write-off of the SafeWay acquisition, exposure to Alberta ...). I believe this is the worst single day drop ever (since 95). Drops of this magnitude take a few days to settle. I am buyer below $20, ideally at $18, which makes the divvy > 2%.