CEF selling out to Sprott

[MarcLacroix]

Hi;

I own shares of 'CEF' and this deal worries me.
Are there any other 'CEF' shareholders here or are you all strictly coins?

Marc

 

[FPrice]

Not being all that conversant with the subject, may I ask what 'CEF' is? To me, with my aviation background, 'CEF' is the International Air Transportation Association identifier for the Westover Metropolitan Airport in Chicopee MA. Yours must mean something else.

But as far as your question, so far I deal only in physical PMs, mainly coins. That could change with proper motivation.

 

[pmbug]

Transaction Highlights:

• Sprott Asset Management ("SAM") to acquire common shares of Central Fund of Canada Limited ("CFCL") and right to administer and manage CFCL's assets for C$120 million in cash and stock
• Upon completion of the transaction, all CFCL Class A shares to be exchanged for units in a new Sprott Physical Gold and Silver Trust
• Over US$300 million in value expected to be realized for CFCL class A shareholders, relative to 9% pre-announcement net asset value ("NAV") discount1
• Adds C$4.3 billion in Assets Under Management ("AUM"), and solidifies Sprott's position as a global leader in precious metals investments
• Highly synergistic with Sprott's current physical bullion product suite
• Expands Sprott's client base by approximately 90,000 investors

...The New Sprott Trust will be substantially similar to the existing SAM-managed physical bullion trusts, Sprott Physical Gold Trust (NYSE ARCA: PHYS) (TSXHYS) and Sprott Physical Silver Trust (NYSE ARCA: PSLV) (TSXSLV), including SAM's best-in-class physical bullion redemption feature. The New Sprott Trust's management fee will be 40 bps of NAV, which is comparable with Sprott Physical Gold Trust and Sprott Physical Silver Trust.

Transaction Summary

The transaction will be implemented pursuant to a plan of arrangement under the Business Corporations Act (Alberta) and is expected to close in the first quarter of 2018, subject to the satisfaction of customary conditions, including receipt of regulatory, securities commission and stock exchange approvals ...

https://finance.yahoo.com/news/sprott-enters-agreement-acquire-management-110000359.html

I don't own any CEF, but what are your concerns Marc?

 

[MarcLacroix]

Fair question.
I have been trying to obtain details for this transaction.
One hundred twenty million dollars seems awfully cheap for a fund which owns a few billion dollars worth of Gold/Silver bullion. Is this some sort of scare tactic to get people to sell their shares?
How much is Sprott paying for CEF's bullion?

Dammit, I was doing just fine up until this bugger Sprott showed up.

Marc

 

[rblong2us]

Whats the issue with Sprott ?

Yeah he 'talks his book' and gold /silver is always about to go stratosph - eric

but at heart he is a p.m. supporter who has done very well out of his efforts and possibly our gullibility.

If he has it right then he will do well out of his purchase and possibly so will any who have already purchased shares in CEF / CFCL, unless of course the CFCL shares were pumped up and now theres a day of reckoning ?

 

[pmbug]

The knock on Sprott AFAIK is that he profits off of the PM markets - off of his investors (for example, when he expanded shares in the closed PHYS fund). But I've never heard one bad thing about anyone getting swindled out of their physical bullion. Sprott has a reputation that's been earned over a long time. I suspect CEF/CFCL will plug along.

 

[MarcLacroix]

Because of the lack of clear details this deal fell into the 'I do not understand' category for me so I unloaded my shares at thirteen and change on December 1st.
I'll take a look at Sprott's new fund when it starts trading...

Marc