cata Posted April 18, 2013 Share Posted April 18, 2013 Westjet continues to build their cash balance and will soon top $1.5 billion which is way over their target range, over 2 months ago Westjet announced share buybacks and so far they bought back small amounts. I really wonder what are they saving the cash for if not for the buybacks or increasing dividends, they got the financing for expansion already, over $800 million from EDB and at very low rates so it would make sense to use some cash for an acquisition and grow the company. I think it would be a great idea and very rewarding for the shareholders.http://business.financialpost.com/2013/04/17/porter-airlines-takeover-speculation/ Link to comment Share on other sites More sharing options...
Seeker Posted April 18, 2013 Share Posted April 18, 2013 I think it would be a great idea and very rewarding for the shareholders.Yeah, rewarding for the Porter shareholders! Link to comment Share on other sites More sharing options...
thor Posted April 18, 2013 Share Posted April 18, 2013 I wouldn't be surprised if Porter is/will be the new Encore before July 2013. History repeats itself! Encore is just a smoke screen. Link to comment Share on other sites More sharing options...
Maverick Posted April 18, 2013 Share Posted April 18, 2013 If it's cheap enough there might be some merit in it. I doubt it would be more than $50 mil though. Just my W.A.G. Link to comment Share on other sites More sharing options...
Guest rozar s'macco Posted April 18, 2013 Share Posted April 18, 2013 That's what Sky Regional is paying for E175 captain. But you have to be a retired AC skipper to get that job...I hope WJ buys porter, if only to prevent the margin erosion that will occur should porter continue to expand out west. Now's the time, with no existing regional to integrate. Despite bean's valid points about profitability, it makes at least a modicum of sense strategically, and with porter un-unionized WJ could easily overlay their own (encore) WAWCON onto porters workforce with virtually no recourse by the workers. Link to comment Share on other sites More sharing options...
CanadaEH Posted April 18, 2013 Share Posted April 18, 2013 I hope to hell we don't buy Porter. Link to comment Share on other sites More sharing options...
CanadaEH Posted April 18, 2013 Share Posted April 18, 2013 Westjet continues to build their cash balance and will soon top $1.5 billion which is way over their target range, over 2 months ago Westjet announced share buybacks and so far they bought back small amounts. I really wonder what are they saving the cash for if not for the buybacks or increasing dividends, they got the financing for expansion already, over $800 million from EDB and at very low rates so it would make sense to use some cash for an acquisition and grow the company. I think it would be a great idea and very rewarding for the shareholders.http://business.financialpost.com/2013/04/17/porter-airlines-takeover-speculation/My guess? Money to be used for widebody aircraft. Link to comment Share on other sites More sharing options...
J.O. Posted April 18, 2013 Share Posted April 18, 2013 I wouldn't be surprised if Porter is/will be the new Encore before July 2013. History repeats itself! Encore is just a smoke screen.I hope you have exceptional lung capacity because if you're holding your breath waiting for it you're going to need it, IMHO. Link to comment Share on other sites More sharing options...
dagger Posted April 18, 2013 Share Posted April 18, 2013 I wouldn't be surprised if Porter is/will be the new Encore before July 2013. History repeats itself! Encore is just a smoke screen.Maybe, but if Porter isn't profitable, and I can't see how it is, the concept has virtually no chance of success under any ownership. Porter began as a blank sheet, low cost non-union operation. There is not much room to drive down costs without alienating the customers it has attracted. If it can't make money lavishing perks on travellers, it's hard to see it making money once those perks have been withdrawn. The island airport only serves a fraction of the Toronto population base - YYZ is more convenient for 85-90 percent of the GTA population, and there is a downtown-YYZ express train under construction.Also, if either WS or AC buys PD, I submit to you that the de facto expectation PD has for near-exclusivity dies, and future slot allocations will be treated commercially, that is, likely auctioned. Certainly, WS can afford to buy all the access it needs, but that just makes it a costlier proposition. And if the CS100 is the only jet capable of flying out of the island for noise reasons, that would mean adding another fleet type. I can't believe a 737-600 makes either practical, technical or commercial sense without a major expansion of the island airport, including a second runway.Best to let the raccoon die a natural death rather than replicate Rhys Eaton's mistake of buying a dying competitor. Link to comment Share on other sites More sharing options...
rudder Posted April 18, 2013 Share Posted April 18, 2013 Porter does not need takeover rumours to spark a discussion over a potential change in ownership - there has been a 'for sale' sign up for quite some time already. But much like many real estate follies, the fatal mistake has been overpricing. And with their latest announcement, apparently a major home renovation is coming The WJ ship has sailed. They are pursuing a significantly cheaper alternative as WJ needs to establish a national regional feed operation, not to buy facilities located at a downtown Toronto airport. And I doubt very much that they fear the competition.AC? How do they justify buying a competitor while pleading poverty on pension obligations? If they wanted to do it, they would need a proxy. Any suggestions?Nobody can figure out what the real plan is at Porter. But judging from the media blitz that has now begun on the 'whisperjet', they seem to have an unlimited PR budget. I wonder if any of this will ever lead to a sustainable profit?Much like the abandoned IPO, this entire initiative makes no obvious commercial sense except to the tenants at the head office of Porter (and the TPA). Link to comment Share on other sites More sharing options...
boestar Posted April 18, 2013 Share Posted April 18, 2013 This is Deluce modus operendi. Start an airline. grow it a bit. compete with bigger players in their sandbox. get bought out. walk away with millions. rinse. repeat. Link to comment Share on other sites More sharing options...
Mitch Cronin Posted April 18, 2013 Share Posted April 18, 2013 This is Deluce modus operendi. Start an airline. grow it a bit. compete with bigger players in their sandbox. get bought out. walk away with millions. rinse. repeat.Sounds like a damn good living, if he can pull it off each time without losing his shirt. ... which I gather he's done, so far?People tried to tell me Max was an ass for bowing out with his $80 million (or whatever it was)... but... How can you fault anyone for that? What would you do for that kind of coin? And he'd bloody well earned it anyway!Deluce may annoy those in the biz who saw the writing on the wall before Porter lifted a wing, but if he makes money at it, and he's not doing anything shady or illegal, how can anyone cry foul? Link to comment Share on other sites More sharing options...
rudder Posted April 18, 2013 Share Posted April 18, 2013 Deluce may annoy those in the biz who saw the writing on the wall before Porter lifted a wing, but if he makes money at it, and he's not doing anything shady or illegal, how can anyone cry foul? How much money has been made for the Porter private equity investors thus far in return on their principal investments? Zero. Link to comment Share on other sites More sharing options...
Seeker Posted April 18, 2013 Share Posted April 18, 2013 ....but if he makes money at it, and he's not doing anything shady or illegal, how can anyone cry foul? You gotta set a higher bar than just what's "illegal". As for what's shady, well, I think it is shady to create a company, shine it up a bit and unload it on some unsuspecting investor (or should I say - bag holder) knowing that it's simply a house of cards. No different than pouring a can of STP oil treatment into the used car you're selling to hide the worn rings and valve guides - not illegal but definitely unethical. Link to comment Share on other sites More sharing options...
Mitch Cronin Posted April 18, 2013 Share Posted April 18, 2013 How much money has been made for the Porter private equity investors thus far in return on their principal investments? Zero.I know nothing of the nitty gritty detail, but surely what will matter to them is what they finally come out with. And if it's still zero, oh well, they gambled and lost. ....you're not about to tell me investing should come with a guarantee, are you? Link to comment Share on other sites More sharing options...
Mitch Cronin Posted April 18, 2013 Share Posted April 18, 2013 You gotta set a higher bar than just what's "illegal". As for what's shady, well, I think it is shady to create a company, shine it up a bit and unload it on some unsuspecting investor (or should I say - bag holder) knowing that it's simply a house of cards. No different than pouring a can of STP oil treatment into the used car you're selling to hide the worn rings and valve guides - not illegal but definitely unethical.Well, again, I wonder just what is an "unsuspecting investor"? Do investors think such investments are guaranteed to win? Your STP analogy is a good one, but I'd call that shady. I don't think Porter is comparable though. He's created a product that some people genuinely do appreciate. I don't know if there are enough of those people for it to survive, but I don't see what he's done wrong if his main concern is to make it attractive enough to sell at a profit. If someone buys it without doing enough homework am I supposed to see that as anything different than a guy who buys a car in the dark and doesn't bother with a test drive?Edited to add:Having just read that back, I see there's something missing.... I happen to think the world should be a place where you can buy a car in the dark without a test drive, and know you won't be cheated. But I've got enough scars to know it ain't so. "Shady" ...If Deluce lies to any potential investors, that would qualify as shady, right? Remember I did say shady was no good. ... but I don't think anyone's made any claims of that kind. Link to comment Share on other sites More sharing options...
boestar Posted April 18, 2013 Share Posted April 18, 2013 I must say his previous ventures "house of cards" did pretty well. White River Air Services, norOntair, Austin Airways, Air Creebec, Air Ontario, Air Manitoba, Air Alliance and Canada 3000 Airlines Link to comment Share on other sites More sharing options...
dagger Posted April 18, 2013 Share Posted April 18, 2013 You gotta set a higher bar than just what's "illegal". As for what's shady, well, I think it is shady to create a company, shine it up a bit and unload it on some unsuspecting investor (or should I say - bag holder) knowing that it's simply a house of cards. No different than pouring a can of STP oil treatment into the used car you're selling to hide the worn rings and valve guides - not illegal but definitely unethical.Unsuspecting? Not if the investor does his or her due diligence. Link to comment Share on other sites More sharing options...
Seeker Posted April 18, 2013 Share Posted April 18, 2013 Unsuspecting? Not if the investor does his or her due diligence.Naturally, that's why the IPO didn't work. Link to comment Share on other sites More sharing options...
J.O. Posted April 18, 2013 Share Posted April 18, 2013 No, but they got their startup capital somewhere. Link to comment Share on other sites More sharing options...
Guest rozar s'macco Posted April 18, 2013 Share Posted April 18, 2013 Airlines, mining companies, dotcoms, junior oil...the list of buyer beware companies is long and distinguished. But I look at this somewhat like facebook buying Instagram. Wasn't facebook already the worlds largest photo-sharing website? Yes, but Instagram posed just enough of a threat to be a pest. Did Instagram even have earnings? Does facebook? So, dotcoms aren't the paragons of due diligence, but the point is that transactions happen for more reasons than just straight expansion. Link to comment Share on other sites More sharing options...
rudder Posted April 18, 2013 Share Posted April 18, 2013 Airlines, mining companies, dotcoms, junior oil...the list of buyer beware companies is long and distinguished. But I look at this somewhat like facebook buying Instagram. Wasn't facebook already the worlds largest photo-sharing website? Yes, but Instagram posed just enough of a threat to be a pest. Did Instagram even have earnings? Does facebook? So, dotcoms aren't the paragons of due diligence, but the point is that transactions happen for more reasons than just straight expansion.rozar,To whom is Porter the biggest competitive threat: WJ? AC? Neither?And what do you believe that Porter is worth? PAH previously valued itself at $450M. Not one analyst or potential buyer has come close to seeing an equivalent valuation. And PAH has never indicated that it is willing to sell off parts (i.e. just the airline operation).Who do you believe should acquire Porter and for what price? Link to comment Share on other sites More sharing options...
Guest rozar s'macco Posted April 18, 2013 Share Posted April 18, 2013 I don't believe they should do one way or another. I'm saying it could happen, its not so simple as "they dont make profit ergo they're worthless." Deluce has no leverage, obviously wants an exit at some point. His way of increasing leverage is to multiply porter's pest factor. Seems to have worked for Instagram and hundreds of other takeouts of financially worthless companies just to make them go away. Link to comment Share on other sites More sharing options...
rudder Posted April 18, 2013 Share Posted April 18, 2013 I don't believe they should do one way or another. I'm saying it could happen, its not so simple as "they dont make profit ergo they're worthless." Deluce has no leverage, obviously wants an exit at some point. His way of increasing leverage is to multiply porter's pest factor. Seems to have worked for Instagram and hundreds of other takeouts of financially worthless companies just to make them go away.Well, I would suggest to you that the tires have already been kicked at Porter but in all cases the asking price was too high (by a factor of 100-200%). I have no idea how much the investors have poured in over time so it is difficult to estimate what they are expecting as ROI. Link to comment Share on other sites More sharing options...
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