Michele RobitailleFording Canadian Coal Trust (Inc Trust)FDG.UN.TODON'T BUYMar 17, 2006
Fording Coal is a trust they used to hold in their portfolio and sold in the the fall. Sold because they felt coal prices were going to soften in 06. Fording is in a healthyposition in regards to their distribution. Most of the growth has already taken place. Believes distributions will come down.
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.)