One of the best opportunities to learn is when reviewing mistakes, and in the case of Fibrek I certainly made one. I did not properly read the tender offer documents and assumed (you know what they say about assumptions…) that enough cash was available to not get prorated and get partly paid in ABH shares. While in total there was enough cash, this was not all available since the amount of available cash was prorated based on the number of shares tendered. ABH also dropped since the tender offer was made making the deal value lower than the all cash result.
I’m guessing that I’m far from the only one who missed this, because ABH managed to get several millions of shares accepted the past weeks while the market price of FBK was at all times above the deal value. Thanks to this I managed to reduce my losses a little bit because I did catch this before tendering my shares, and sold my shares back to the market yesterday at a loss. At yesterdays close the deal value (0.55 + 0.0284 * 12.37 = CA$0.901 ) and price of FBK ($CA0.90) was nearly identical .
So what lessons should I learn from this:
- Never be lazy reading the details in important documents.
- Don’t cut corners when something is time sensitive: if I don’t have enough time to do proper research, just skip it.
No FBK.TO position anymore