Prem Watsa's Business Style on Display - Controlled Greed Investor

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Prem Watsa's Business Style on Display
Sep 09, 2009 02:51 AM UTC

Controlled Greed Investor

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Via CONTROLLED GREED.com:

Barry Critchley has a column in Canada's Financial Post about Fairfax Financial (FFH) and its deal to takeover the rest of Odyssey Re it doesn't own. A part:

"We have a lot of reverse enquiries," said Paul Rivett, Fairfax's
chief legal officer, referring to calls from either existing or new
shareholders who wanted to let the company know that they would be
willing buyers if and when Fairfax decided to raise capital following
last week's decision to purchase the rest of Odyssey Re Holdings Corp.

"We
got calls from shareholders who had our stock and wanted more and from
others who had been waiting for a while to get in," said Mr. Rivett.

So
rather than launch a US$1-billion bought deal and make a lot of Bay St.
underwriters richer, Fairfax decided to split the deal and cash in on
the pent up demand itself.

The end result: Fairfax saved
about US$24-million in sales commissions because while it paid 4% for
the bought deal, it paid a mere 1% for the US$800-million it placed
itself, but still process by underwriters.

If you're a Fairfax shareholder, or just a Watsa observer, be sure to read the entire thing.

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