With Las Vegas getting a MLB team, what are your thoughts on the write downs they’ll likely have in potentially relocating the AAA team and minimal residual value of the stadium?
Thanks for reading; there are a lot of assumptions in your comment. Yes the Athletics are moving to Las Vegas. It may in fact be a catalyst. As Edmund said in the movie Vanilla Sky: “There are no guarantees, but remember: Even in the future, the sweet is never as sweet without the sour”. Lol!
Nice write-up! I just have one comment on Ackman's involvement: I'm not sure the spinoff and rights offering this time is one of those Greenblatt describes in his book. As you mentioned, rights offerings often obscure things for outside investors, allowing insiders to grab large stakes.
However, in this case, I think Ackman had to agree to this setup to make the privatization of HHH happen. It’s a good deal for him—putting down less than $200M instead of raising his offer by $1B. Since this is all about setting up his C-corp investment vehicle, he doesn’t mind losing $200M to make it work. So I wouldn’t see his large stake as an indication that he believes SEA is a particularly attractive investment.
That said, the spinoff mechanism is still in place, and this could be an option play on its own merits.
I understand what you are saying and agree it made the HHH negotiation much simpler to remove Seaport. My premise in the article is simply, ex-Seaport neighbourhood and the cash, there is still a lot of value there. The opportunity was created by the spinoff and the backstop, at the margin, gives me some comfort on governance (and of course, time on the turnaround)
With Las Vegas getting a MLB team, what are your thoughts on the write downs they’ll likely have in potentially relocating the AAA team and minimal residual value of the stadium?
Thanks for reading; there are a lot of assumptions in your comment. Yes the Athletics are moving to Las Vegas. It may in fact be a catalyst. As Edmund said in the movie Vanilla Sky: “There are no guarantees, but remember: Even in the future, the sweet is never as sweet without the sour”. Lol!
Nice write-up! I just have one comment on Ackman's involvement: I'm not sure the spinoff and rights offering this time is one of those Greenblatt describes in his book. As you mentioned, rights offerings often obscure things for outside investors, allowing insiders to grab large stakes.
However, in this case, I think Ackman had to agree to this setup to make the privatization of HHH happen. It’s a good deal for him—putting down less than $200M instead of raising his offer by $1B. Since this is all about setting up his C-corp investment vehicle, he doesn’t mind losing $200M to make it work. So I wouldn’t see his large stake as an indication that he believes SEA is a particularly attractive investment.
That said, the spinoff mechanism is still in place, and this could be an option play on its own merits.
PS>. You might take a look at Mandarin Oriental. I see you wrote up Miramar. Our fund is a shareholder in MOIL.
Thanks for the suggestion. MOIL is listed in SGX?
I understand what you are saying and agree it made the HHH negotiation much simpler to remove Seaport. My premise in the article is simply, ex-Seaport neighbourhood and the cash, there is still a lot of value there. The opportunity was created by the spinoff and the backstop, at the margin, gives me some comfort on governance (and of course, time on the turnaround)
Super! A nice fit for the RIF & 22 years left to that termination.
Thank you Alan!