Michele RobitailleFording Canadian Coal Trust (Inc Trust)FDG.UN.TOWEAK BUYNov 18, 2005
Has benifited substantially from high metalurgical coal prices. Negotations are going to be developing for coal prices for next year and the general view is that prices are going to soften. Probably not a bad buy at this price, but as the income is paid out, you could see a drift in the unit price.
Being acquired by Teck Cominco (TCK.B-T). If you are holding this in a taxable account, there are some very negative consequences. In an RRSP or RIF you can avoid the tax consequences. He sold the majority of his holdings into the market prior to the transaction.
Being acquired by Teck Cominco (TCK.B-T). Arbitrage companies were forced to sell. There is a financing gap and Merrill Lynch (MER-N) is part of that, so the market is concerned. The deal could fall apart.
If held in an RRSP, you could continue holding. If it's in a taxable account, consider selling the units before the new deal gets done. Take it as a gain as opposed to the tax treatment that will supposedly come on the consummation of the deal. (Editor’s note. Check with your broker.)