Amaranth Uses Natural Gas Blow Up to Put The Screws to Cinram
Sorry - another Amaranth story. This one is from an amended 13D filing on the Canadian income fund, Cinram International Income Fund (TSX: CRW.UN), which Amaranth holds a 15.3% stake in (8 million units).
It seems that even in its current state, Amaranth is not backing off its stance that Cinram should sell itself.
In a letter dated September 18th Amaranth said: "Earlier this morning the Amaranth investment fund group announced significant trading losses in its natural gas trading business. Shortly thereafter, the trust units of Cinram came under intense selling pressure. Given the absence of any fundamental news about Cinram, we believe this selling was due to market participants speculating about ACT's intentions with respect to its Cinram holdings.
It has been our view, which we understand is shared by the trustees and management of Cinram, that the public markets have failed to recognize the value of Cinram's business for quite some time. Given that the Cinram unit price has dropped 5% this morning without any fundamental news, we have come to the conclusion that this fact will persist for the foreseeable future.
We believe that the trustees can materially enhance unitholder value by concluding, as we have, that Cinram simply will not receive an appropriate valuation in the public markets. Therefore, we believe that the trustees of Cinram should immediately retain financial advisors to explore a sale of Cinram, including a going private transaction."
In a public response to the letter on Tuesday, Cinram Chairman, Henri Aboutboul, said "For the record, the Board has no intention of selling, or exploring the possibility of selling, the Fund or any of its operating subsidiaries or their respective businesses."
It seems that even in its current state, Amaranth is not backing off its stance that Cinram should sell itself.
In a letter dated September 18th Amaranth said: "Earlier this morning the Amaranth investment fund group announced significant trading losses in its natural gas trading business. Shortly thereafter, the trust units of Cinram came under intense selling pressure. Given the absence of any fundamental news about Cinram, we believe this selling was due to market participants speculating about ACT's intentions with respect to its Cinram holdings.
It has been our view, which we understand is shared by the trustees and management of Cinram, that the public markets have failed to recognize the value of Cinram's business for quite some time. Given that the Cinram unit price has dropped 5% this morning without any fundamental news, we have come to the conclusion that this fact will persist for the foreseeable future.
We believe that the trustees can materially enhance unitholder value by concluding, as we have, that Cinram simply will not receive an appropriate valuation in the public markets. Therefore, we believe that the trustees of Cinram should immediately retain financial advisors to explore a sale of Cinram, including a going private transaction."
In a public response to the letter on Tuesday, Cinram Chairman, Henri Aboutboul, said "For the record, the Board has no intention of selling, or exploring the possibility of selling, the Fund or any of its operating subsidiaries or their respective businesses."
posted by Lon at 3:55 PM
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