Pity Bill Ackman and his Pershing Square hedge fund.
He's been after Botox maker Allergan for months now. Sadly, he was outspent by Actavis, an American generics giant headquartered in Ireland to avoid US corporate taxes.
But don't feel too sad for Bill. Reuters has the hedgie pocketing a cool $2,300,000,000.00 for his six months effort to coral the Botox manufacturer.
Nice work if you can get it.
Showing posts with label Pershing Square. Show all posts
Showing posts with label Pershing Square. Show all posts
Monday, November 17, 2014
Monday, May 19, 2014
Globe & Mail sticks it to farmers
Barrie McKenna has a story on the front page of the business section today bemoaning the injustice of Bill C-30, aka the "Fair Rail for Grain Farmers Act".
In McKenna's view, fairness is a zero-sum game. "What's fair for farmers is by implication less fair for every other business that uses the rails to move goods..."
I think what's unfair is writing an article purportedly about the railways' lack of capacity to move grain, without mentioning that CP Rail has idled 400 locomotives and 10,000 rail cars since US hedge fund Pershing Square bullied its way into control of the company. You don't need a PhD in logistics to conclude that would reduce capacity.
And McKenna is either naive or disingenuous when he writes "Ottawa could also have simply let the market fix the problem. When there is excess demand and short supply of rail capacity, freight rates will naturally go up... it would give the railways more revenue to make badly needed investments, helping resolve capacity constraints."
What foolishness! Why would the railways want to reduce capacity constraints that increase freight rates and profitability? What the management of CP Rail has shown is a commitment not to investing in the railway, but in maximizing the amount of money they can take out of it.
Back in March the company announced their intention to spend close to a billion dollars on a share buy back. That's an expenditure that does absolutely nothing for rail capacity and won't get one bushel of grain to market one minute sooner. It's an expenditure designed to boost the share values of stock-holders, nothing more and nothing less.
Bill C-30 may well be a heavy-handed solution to a rare and unforeseen problem, but when the invisible hand of the free market isn't working, sometimes the heavy hand of regulation is needed to move things along.
In McKenna's view, fairness is a zero-sum game. "What's fair for farmers is by implication less fair for every other business that uses the rails to move goods..."
I think what's unfair is writing an article purportedly about the railways' lack of capacity to move grain, without mentioning that CP Rail has idled 400 locomotives and 10,000 rail cars since US hedge fund Pershing Square bullied its way into control of the company. You don't need a PhD in logistics to conclude that would reduce capacity.
And McKenna is either naive or disingenuous when he writes "Ottawa could also have simply let the market fix the problem. When there is excess demand and short supply of rail capacity, freight rates will naturally go up... it would give the railways more revenue to make badly needed investments, helping resolve capacity constraints."
What foolishness! Why would the railways want to reduce capacity constraints that increase freight rates and profitability? What the management of CP Rail has shown is a commitment not to investing in the railway, but in maximizing the amount of money they can take out of it.
Back in March the company announced their intention to spend close to a billion dollars on a share buy back. That's an expenditure that does absolutely nothing for rail capacity and won't get one bushel of grain to market one minute sooner. It's an expenditure designed to boost the share values of stock-holders, nothing more and nothing less.
Bill C-30 may well be a heavy-handed solution to a rare and unforeseen problem, but when the invisible hand of the free market isn't working, sometimes the heavy hand of regulation is needed to move things along.
Tuesday, June 4, 2013
That Ackman magic
About a year and a half ago Bill Ackman and his Pershing Square hedge fund gobbled up 24 million CP Rail shares at a total cost of about a billion dollars.
Today Ackman announced that Pershing will sell off 7 million of those shares for anticipated proceeds of about a billion dollars.
That means Ackman and his investors will have all their money out of CP Rail but will still own shares worth over $2 billion.
That makes Bill Ackman a genius.
It also means that the vast majority of the 6,000 CPR employees made redundant by Ackman's "reset" of the CPR will be a burden to the Canadian taxpayer for years to come. The vast majority of those redundancies have hit workers in middle age who will be forced onto EI and welfare.
Six thousand workers forced onto the dole.
A multi-billion dollar liability for the public purse.
A two billion dollar windfall for the investors.
And all of this is considered fair, just, good business, and perfectly legal.
Today Ackman announced that Pershing will sell off 7 million of those shares for anticipated proceeds of about a billion dollars.
That means Ackman and his investors will have all their money out of CP Rail but will still own shares worth over $2 billion.
That makes Bill Ackman a genius.
It also means that the vast majority of the 6,000 CPR employees made redundant by Ackman's "reset" of the CPR will be a burden to the Canadian taxpayer for years to come. The vast majority of those redundancies have hit workers in middle age who will be forced onto EI and welfare.
Six thousand workers forced onto the dole.
A multi-billion dollar liability for the public purse.
A two billion dollar windfall for the investors.
And all of this is considered fair, just, good business, and perfectly legal.
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