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American Overseas Group Limited Message Board

  • girthner21 girthner21 Oct 14, 2011 11:51 AM Flag

    Preferred A holder

    Eaton Vance who holds quite a bit of the preferred A shares recently purchased some 350k or so shares of the common. Not sure if that means much but found it somewhat interesting. Not much else going on the board...any thoughts?

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    • I’ve been contemplating that myself for quite some time now… My initial question is why was PRCP, a provider of measurement and inspection solutions in the automotive industry, holding the Series B shares in the first place… Seems like an odd cash management decision on their part.

      That said, I’m surprised that no one has talked about why Frank Gralla wasn’t eligible to join the BoD. Gralla is the CFO of the Twenty-Nine Palms Band of Mission Indians, whom held/holds something like $5mm of the Series B. That organization filed suit against RAM Holdings in April 2011 suggesting that, among other things, the tender offers that were completed were done in a way that was ultimately to the benefit of holders of the common shares of RAMR. In early October 2011, 29 Palms voluntarily dismissed the action against 1) RAM Re/RAM Holdings without prejudice and 2) with prejudice against Steven Tynan (also a defendant).

      My legal speak is rudimentary at best, so if anyone has a legal background I’d love to hear their opinion on this case and what it represents from a strategic standpoint. Most ARS cases that I’ve seen so far have targeted the investment banks and not the companies themselves, but since RAMR used Lehman initially to issue the securities they (29 Palms) may not have had another option.

    • Perceptron, who owns the Class B, indicated in their annual last year, that they were going to tender their shares, but received some sort of info that made them decide not to tender. Not sure what that info was, but now they have someone on RAMS board.

    • Please elaborate... How do you "know for a fact" that Eaton Vance and USAA were interested in tendering? Not to be too contradictory here, but if Eaton Vance and USAA (who in aggregate hold almost all of the remaining outstanding series A shares) had offered to tender their shares to RAMR at a level that was attractive (i.e. $0.25 on the dollar), Steele would most likely have accepted the offer. It is more likely that EV and USAA were interested, but at levels that were not attractive to RAMR at the time.

    • Where management has failed is in not repurchasing more of the PFD shares a year ago. I know for a fact that Eaton Vance and USAA were interested in tendering them back to Ram but Steele would not extend the period for the tender and would not entertain the repurchase of PFDs after the expiration of the tender. They could have easily added a couple of dollars to to book value...but because they have these grand notions of re-building Ram into a reinsurer, they opted to keep the capital...they figure it is free since they don't have to pay dividends on it. But it's not free....as you say, the cost of the capital just doubled in a year. Bunch of dummies.

    • Do you have a link...I don't see it. It would be unlikely that EV would buy RAMR common...if they own it, they may have swapped their pfd for it...in which case that would be VERY good for the stock!

      • 1 Reply to valuguy2002
      • Morningstar indicated that Eaton Vance held over 1% of the outstanding shares, but amazingly enough they no longer list it. However, Eaton Vance Balanced fund A indicates they hold Ram shares. All the other Eaton Vance funds that hold the preferred shares indicate that they are the series A. This fund does not indicate it, which is why I assume they are common. Eaton Vance has a pretty navigable website to review the holdings in each of their funds. Edgar is a little more difficult when it comes to this particular fund.

 
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