Andrew Guy, CFAFording Canadian Coal Trust (Inc Trust)FDG.UN.TOSELLJun 27, 2007
Dependent very much on the price of coal. At the moment, most of their coal ends up going to Japan and China, which has been a growing demand. However, the key supplier into those markets has been Australia and they really set the price. Treat it as a trade, not a “buy and hold”. Would consider taking profits.
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.)