Stock price when the opinion was issued
Stock vs. Stock: MBT-T vs. BA-T. Both have their challenges. BA: very good management. Almost through rolling out fiber to the home. Decent dividend. High payout and no wireless exposure. BA has more catalysts. Payout ratio will come down when fiber to the home is complete. Maybe someday BCE will buy them out.
Why is this selling below the bid price? He did some quick calculations when the bid came out and sold at a price over $31. The reason for this is that they have cut out the dividend. You are going to wait to November, and at that point in time you are going to get $31, so you have to discount that (The no dividend aspect?) Or you are going to get some mix of Bell stocks. In the meantime, the stock is going to trade off the Bell component. The stock is not going to do much. He would probably just sit with this.
Continues to surprise him. Has a 150% payout ratio, but no one expects a dividend cut in the near-term. They take care of a lot of the remote regional parts of delivering the Bell (BC-T) platform and have about a 25% penetration rate all the way from Atlantic Canada to South-western Ontario. Doesn’t see any reason why the dividend should be cut. He would rather just move into the parent company which will give you a better growth profile.