Glenn MacNeill, P.Eng.Fording Canadian Coal Trust (Inc Trust)FDG.UN.TOCOMMENTMar 07, 2008
For this one, you have to make a projection on metallurgical coal prices. Most of it is sold into the Pacific rim countries. Most of it comes from Australia and the balance from Canada through this company. It really depends on steel demand, which he thinks will continue for some time. He is somewhat bullish on it.
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.)