Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Goodman's council needs a glass of cold water and perhaps a cigarette. The evidence is paper thin, he should be tearing strips off Mooky if he had anything - instead he keeps reverting to everything conspicuous only by it's absence
on the point about consent - one thing that came up yesterday was a critique of a report by KPMG (i think) from a Cineplex expert witness. I believe this related to the consent for Cineplex to relinquish the 'Pad Lands' site (or similar).
The Cineplex defence was that they did not require consent because the site effectively had no value to them - not that they had asked for consent. There was additional argument about the value of this site to Cineplex - obviously CW saying it was substantial but CP saying it was nothing
on the point of value - this was a technical matter, Cineplex said something along the line that they held a covenant on the land/site but it belonged to someone else, so only the owner could obtain the actual value - just holding the covenant was worth little to them. This sounds the opposite to their argument about the synergies, where they feel entitled to claim for the synergies which would only ever have been accrued by Cineworld post completion
yes, MF report on Cineworld EVERY DAY, they are always 'on balance' bearish - but MF is a meme stock as a website, they are clearly dying to be all in.
But how can you consider their opinion seriously if there is no mention of the court case in any detail? it is utter trash
my guess is that the current set of short sellers are in it because they think Cineplex will win the case, at best (in their view) forcing the Cineworld price to 0. I dont think the SP is going higher before the verdict, or before one side lands a killer blow - which has not happened yet. That is possibly good for Cineworld as theirs is the harder case to prove, it should be easier for Cineplex to land punches. The witnesses are all Cineplex and evidently hostile to Cineworld (no doubt many had equity!)
it's clear that Cineplex were more worried about the debt ceiling than the pandemic - they along with everyone else had no idea how long the pandemic would last. When the deal was called off in June it was a long way past the time the court case was focussed on which is March and April, by which point the pandemic was looking much longer term and more serious. To think that Cineplex forecast this in early March is wishful thinking.
That said, as March progressed the pandemic hit and whether Canada had locked down or not it was clear that something was going to happen. So from then, perhaps it is fair to say that the ordinary course was to take the actions that they did to preserve cash. BUT - this did not start in March, it started well before. March was just the time when it came to the crunch and they had to roll over more debt - then again in april, and by which time Cineplex were desperate for an impossible deal to take place. They had been shamelessly managing the debt limit since the takeover was announced in Dec.
Had the sale taken place in June it would have benefitted the shareholders, but it is almost certain that forcing a sale would have caused CW to go bankrupt & would be detrimental to Cineplex, and the court is (as i understand) deliberating for the business - not shareholders (if this case fails I would not be surprised to see a second, weaker suit from the shareholders). This should have been a concern for Investment Canada, though as it didnt get tot his point its hard to say how relevant it would be
Cineplex are fighting tooth and nail, even trying to claim damages based on the potential synergies Cineworld may accrue post completion when Cineplex no longer exists in its current form. I suspect this may have affected the valuation placed on CP by CW, but can this really affect CP in the other direction? Would the 'synergies' CW hoped for be relevant if the business was sold elsewhere? If two companies were bidding for CP the value of the synergies would in theory be worth the marginal cost of the lower set of synergies, CP could not force the buyer to pay more just because they have better synergies if there is no competition at that level
Did a MAE occur - almost certainly, but this is precluded by the terms of the deal. Did Cineplex breach the ordinary course - again almost certainly yes - but the devil is in the detail, can this be reasonably decoupled from the pandemic?
...chin scratching resumes at 3pm
no idea where the line of the law sits on this - but on the face of it its quite ridiculous that the Cineplex expert witness is suggesting that Cineplex can count the post trade 'synergies' as a Cineplex loss. i.e. that Cineplex feel they are entitled to claim for operational gains that Cineworld may, may have benefit from post-completion of the deal & after Cineplex had been sold