Here's What I Have to Say About This News : China May Return with a New Higher Offer for Bombardier Transport - Last Offer was $7-8B - Globe and Mail
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Quebec, February 28, 2016 - by Sylvain Faust for Fliegerfaust
Let me write this to you quickly…
Some Canadians do not understand the real value of Bombardier Inc. I mean "Real"… It is not what you see on the stock exchange (i.e. about 2 billion shares @ about $1) showing a market capitalization close to only $2 billion (more on this in a minute). But there is also a very deep economic impact value to this country if we were to be without it, if Bombardier Inc. was acquired by a foreign entity.
But why only $2B market value on the Toronto Stock Exchange for Bombardier Inc.? One of the reasons is that the Toronto financial sector on Bay Street is in some way "pissed" over the Bombardier-Beaudoin Family's total control over the majority of the vote, controlling what happens with Bombardier Inc., why?
So far, "the family" always said they will never sell the company (giving control to the open market, i.e. the entire planet). We are very lucky! Why? Toronto Bay Street and the financial capital market sector world would love for the family not to have control because that would open the door to a takeover of Bombardier Inc., and this, would serve create huge gains selling the company shares at a very higher stock price, cashing in lots of gains. But at what economic cost to us, Canadians? There is a huge "Discount" pressure on the share price knowing that nobody can come up and buy Bombardier Inc. outright. You know who could be fighting mad about the control of the "Family" over Bombardier Inc. and why. Good for us?
Foreign ownership of Bombardier Inc. would open the door to a complete and total move out of the country of all its operations and assets, not just all the jobs at Bombardier Inc. but also all the jobs related to the sectors where it operates. Losing the "engine" to innovation, the driving forces that currently generate high-tech knowledge to be acquired, generating start-up from ex Bombardier employees and suppliers, specialized higher education offered by our universities and aeronautical mechanical schools, higher salary and income taxes collected by us (the government is us), a deep basket of funds for investing in other ventures offering ways to help secure the future of this country, trying to keep Canada at the technical edge in front of other fast and growing nations spending so much in their education systems, engineering, automation, pushing for values like "excellence" (oops, another subject… our education system!)
How does this work? As you might know, few months ago China offered $7 to 8 billion Bombardier Inc. just for its Transport division, Bombardier Transport (a division of Bombardier Inc. representing about 50% of its business and value, oh, 2+2=… wow, far from the stock market total value of just $2 billion…). The Chinese might come back and offer more; this was only their first offer…
Some "commentators"… are suggesting that Bombardier does not need the "temporary investment" in the new high-tech CSeries, that Bombardier Inc. (obviously the Family controlling the vote) should accept that such offers like the one from China, and let go everything to do with its Transport division (a very successful one, making top High Tech High Speed Trains around the world, rechargeable on the go electric public busses, subways, etc. (see https://www.facebook.com/fliegerfaust/
Hope this was informative to some of you.