Disclaimer: That is very illiquid and solely applicable for small PA’s like mine
Revenue Alternative Realty Buyers (IOR) ($75MM market cap) is the smallest piece of the ARL/TCI/IOR Russian nesting doll, in a earlier life it was akin to a mortgage REIT (though its a c-corp), immediately they solely personal one mortgage, their primary asset is a receivable from Pillar Asset Administration, the exterior supervisor and affiliate of the bulk proprietor of ARL/TCI/IOR. IOR has no purpose to exist, TCI and an affiliate (RAI) personal 89.78% of IOR and are presently conducting a young supply (deadline simply prolonged to 1/29/25) at $18.00/share to push that possession degree above 90% so as to squeeze-out the remaining minority shareholders.
Plans for IOR.
Besides as disclosed within the Provide to Buy, TCI doesn’t have any current plan or proposal that will consequence within the acquisition by any particular person of extra securities of IOR (besides TCI might buy extra Shares if out there at engaging pricing or TCI might buy all Shares tendered within the Provide if greater than 100,000 Shares are tendered), the disposition of securities of IOR, a unprecedented company transaction, similar to a merger, reorganization or liquidation, involving IOR, the sale or switch of a fabric quantity of IOR Shares (besides TCI reserves the precise to contemplate any such transactions in TCI’s discretion), any materials adjustments to IOR’s current dividend coverage, indebtedness, capitalization, company construction, enterprise or any materials change to the composition of IOR’s administration or the IOR Board.
It’s anticipated that, initially following the conclusion of the Provide, the enterprise and operations of IOR will, besides as set forth on this Provide to Buy, be continued as a stand-alone enterprise unit considerably as they’re presently being carried out. TCI will proceed to guage the enterprise and operations of IOR throughout and after consummation of the Provide and can take such actions it deems applicable beneath the circumstances then present. Thereafter, TCI intends to proceed to work with IOR’s administration as part of a complete evaluation of IOR’s enterprise, operations, capitalization and administration with a view to optimizing improvement of IOR’s potential at the side of TCI’s enterprise.
After completion or termination of the Provide, TCI might search to accumulate extra Shares by open market purchases, privately negotiated transactions, or a young supply or trade supply or in any other case upon phrases and at costs as TCI determines, which can be roughly than the value paid within the Provide. If TCI doesn’t purchase enough Shares within the Provide, together with any subsequent providing interval, to satisfy the Minimal Situation which might then put TCI (assuming it acquires the Shares held by its Affiliate) beneath the short-form merger provisions of the Nevada Revised Statutes, with out a vote of IOR’s remaining stockholders, TCI will probably search to accumulate extra Shares to position it ready that the Minimal Situation would have been glad.
No Stockholder Approval Required.
Beneath the Nevada Revised Statutes, if TCI acquires, pursuant to the Provide or in any other case (together with by acquisition of the Shares held by its Affiliate), at the least 90% plus 1 of the excellent Shares, TCI believes it may, and will sooner or later, effectuate a merger beneath the short-form merger provisions of the Nevada Revised Statutes with out a vote of the IOR stockholders. If TCI doesn’t finally purchase at the least 90% plus 1 Share of the excellent Shares, any merger or consolidation involving IOR and TCI would wish to hunt the adoption and approval thereof by a vote of IOR’s stockholders. Thus, assuming that the Minimal Situation is glad, upon consummation of the Provide, TCI (along with its Affiliate) would personal enough Shares to allow TCI, with out the vote of some other IOR stockholder, to fulfill the necessities to approve any merger or consolidation with out a vote of IOR stockholders.
Shares presently commerce above the $18/share supply worth, which means we may see a bump to shake out some extra shares previous to the squeeze-out.
The “receivable from associated events” is solely a money sweep again to Pillar Asset Administration, when some buyers make the remark that administration makes use of an organization as their very own private piggy financial institution, that is actually what is occurring right here. Pillar is taking a mortgage out from IOR with out a maturity date, the rate of interest was once prime + 100, however in some way acquired amended to a flat SOFR (some 3% above prime usually) final yr. In order that’s the kind of individuals we’re coping with right here.
The squeeze-out is meant to be finished at “honest worth”, given we’re speaking about close to money and its a present asset (the receivable from associated events asset is ruled by a “money administration settlement”), ebook worth ought to be fairly near honest worth.
E book worth is ~$29.71/share as of 9/30, it will have moved up above $30/share at yr finish. Now, I do not anticipate TCI/Pillar to pay full ebook, however someplace between $18 and $30 leaves a whole lot of room for administration to make the most of minority shareholders whereas nonetheless offering some upside to a dormant inventory. The opposite huge danger right here is timing, though this appears fairly properly spelled out of the eventual path, guessing the squeeze-out occurs inside 9-12 months after the tender closes.
Disclosure: I personal shares of IOR
