American Capital LTD (ACAS)

[pappi]

Hello PC:

Thanks for the specs, and in the public domain at that. lol. I find myself with a large pile of cash needing to be put to work. I'll have a look at where your pile led you.

best,
p

[Prudent Capitalist]

Pappi: I can't PM, but can tell you that I got out of ACAS above $17 back shortly before the election and market run-up, and have done very well with the proceeds, which remain in a tax-deferred retirement Acct. I re-deployed significant chunks of the proceeds of the ACAS liquidation in WFC just under $45, in NNI at $38.93, and in KMI at around $20.60. KMI will most definitely return to its normal prior trading range above $30 in time, IMO. I am also continuing to accumulate shares in Niocorp (NIOBF) which should have its breakout year in 2017 following the expected release of the BFS any week now.

[pappi]

Hello PC:

Good on you, of course. I've opted to see the deal through, since I'd face a whopping cap gains on the long term hold, which I think holding will avoid.

I did take the run up to the election and state cannabis votes to put a dollar or two into that little sector. Not tending to play, rather buy careful, hold long.

Best,
-p

[Prudent Capitalist]

I still think the transaction stinks for ACAS holders given that the NAV is over $20, and the maximum value of the deal is around $17.50. I sold out of ACAS at around $17.10 last month and the 3 investments into which I placed the proceeds are all up very significantly since then, with 2 of them being just adding to existing positions at favorable levels. So, have come out much better by not waiting around for this deal to close. GLTY.

[Prudent Capitalist]

Note that the recently release financials list the NAV at $20.70. This pending deal smells to high heaven. How could the Executives and Directors of this company believe they are fulfilling their duty to shareholders in selling everything for a value of just $17.50?

[Prudent Capitalist]

I see that the tenor of the discussion there is quite ugly, and that is not surprising. This deal is not a positive one for ACAS investors. The executive leadership of the company needs to wake up and rethink this deal.

[pappi]

Indeed. I can see that. When Warren Buffet bought out Heinz, and we had a few shares, I don't recall any legal beagles fighting about THAT buyout price.

We'll see. In any case, there's going to be some serious asset reallocation going on later this year. One way or the other.

And we'll keep an eye on this going forward. If you do not follow the Yahoo ACAS board, I can suggested Newly Minted Bucks (I think he changed his moniker...) on that board as a remarkable whiz on all things ACAS.

Best,
Pappi

[Prudent Capitalist]

The market is not reacting favorably to the deal and obviously does not like it. My concern right now is the fact that ACAS bought back around 46%+ of the outstanding shares, and the NAV is supposedly up over $20 right now, yet this deal is for just $17.40 per fully diluted share, and the market is actually valuing it below that level. Time will tell, but this does not look like the best outcome to me right now.

[pappi]

Hey PC:

Well, now, this is a major event. I've been so long holding this I'm a bit surprised to see movement. Wonder what happened to Trinity (another long-termer here)and what s/he makes of it.

Gonna free up a lot of loot needing reallocation, that's for sure.

congrats to those that held, I suppose, is now in order.

Pappi

[Prudent Capitalist]

The market's reaction to the deal, which is supposed to be worth $17.40 per share to current shareholders, is very negative. And, I question why our management team would accept this deal when they have been touting the share buybacks and claiming ACAS's NAV is above $20. It is no wonder that shareholder rights law firms are already circling the deal and putting out PR's.

[Prudent Capitalist]

Combined value of today's transactions is stated to be $17.40 per fully diluted share to current ACAS holders, but the market is holding substantially below that. It does appear to me that it may take some time for everyone to understand the somewhat complicated 2-part transaction involving the separate sale of the AGNC assets, and the sale of the remaining assets to Ares.

[UpTickMeA$AP]

WMIH emerged from the bankruptcy, a shell with $5.8 Billion in NOL. KKR came in and is currently looking for M&A opportunities. Some other big players involved also.

No, nothing concrete.. Of course.

[Prudent Capitalist]

The old WAMU? I thought they went under and were gone totally after JP Morgan Chase took them over and bailed the thing out back during the financial crises. Anything conrete you can elaborate on?

[UpTickMeA$AP]

I see some speculating WMIH will be the ones to write the check for ACAS.

[pappi]

Roger that. Sure hope it works out positively for the long term holders.

- Pappi

[Prudent Capitalist]

Buyout potential reflected in the recent March 14 PR, and March 17 filed 8-K as summarized below:

BETHESDA, Md., March 14, 2016 /PRNewswire/ -- American Capital, Ltd. (Nasdaq: ACAS) ("American Capital" or the "Company") announced today that its Board of Directors has reset the date of its Annual Meeting of Shareholders to July 29, 2016 and that June 10, 2016 will be the record date for determining shareholders eligible to vote at the Annual Meeting. The Company had previously announced that June 30, 2016 would be the date of the meeting. After the record date, the Company will distribute to all shareholders of record on that date a Notice of Annual Meeting and Proxy Statement, which will set forth the time of day and place of the meeting and will include information on matters to be voted upon at the meeting.

The Company noted that the American Capital Board of Directors has postponed the Annual Meeting in consideration of the Company's ongoing strategic review process. Due to the significant preliminary level of interest from strategic and financial prospective purchasers of the Company or certain of its business lines, the Board believes that, consistent with its goal of maximizing value for all shareholders, it is prudent to work to complete the upcoming phases of the process before the Annual Meeting schedule begins.

American Capital noted that there can be no assurance that the continuing strategic review process will result in a transaction or transactions and that it will not necessarily report further on the progress of the process.

http://ih.advfn.com/p.php?pid=nmona&article=70759268

[Prudent Capitalist]

They retained an investment bank to shop the entire company around, and then postponed the annual meeting in order to allow additional time for the negotiations and process to further play out.

[pappi]

Just noticed this myself and planned to post a link, but I see PC announced first:

http://finance.yahoo.com/news/american-capital-announces-repurchase-21-143000766.html

That 8.8% is a significant bit of buyback.

best,
Pappi

[pappi]

Hello PC:

I'm still long on this one. I don't quite see how you anticipate a "buyout" from the piece. Can you elaborate?

Pappi

[Prudent Capitalist]

Bingo! Great news! ACAS bought back another 8.8% of its outstanding shares!!

BETHESDA, Md., April 1, 2016 /PRNewswire/ -- American Capital, Ltd. (Nasdaq: ACAS) ("American Capital" or the "Company") announced today that in the first quarter of 2016 it made open market purchases of approximately 21.2 million shares of American Capital common stock, or 8.8% of the Company's outstanding shares as of December 31, 2015, under its stock buyback program (the "Program"). The shares were purchased at an average price of $13.96 per share, totaling approximately $296.5 million.

[Prudent Capitalist]

Excellent analysis here. Liking the increase in PPS of late, and looking like a buyout is on the horizon.

http://seekingalpha.com/article/3959540-understanding-american-capital-ltd-2015

[Prudent Capitalist]

Bingo! ACAS re-purchased another 8% of its outstanding shares in the 4th Q. If this keeps up there won't be many of us left holding shares!

[Prudent Capitalist]

Definitely great news, IMO, and will result in a very profitable holiday season for longs here. The more shares bought back in the better for long holders here.

[pappi]

Interesting to notice the ACAS activity and price jump. May it continue and not resume prior trends...a slow, steady dribble down. Too bad, though, that the spin appears on hold. It would have been nice to see some determinative action. But these developments may result in even better days ahead.

- p.

[Prudent Capitalist]

You may want to look at getting back into ACAS with today's news. The continued aggressive buying back of shares at PPS under 85% of Book Value/NAV will benefit longs greatly here, IMO.

[Prudent Capitalist]

Here we go. Very positive news and developments this am for ACAS.

[Prudent Capitalist]

Great news out here today! I remain all in and fully supportive of buying back in large chunks of the shares outstanding at prices less than 85% of the ever increasing book value. Great stuff, and will bring a very happy holiday season here with ACAS.

[pappi]

Nice to see at least 1 (one) other person who enjoyed the report...not to mention the price jump. Been with this a while, still planning to stay with cost for at least a year of dividends before running freebies forever. Then I'll start again with cost in something else.

- p

[Prudent Capitalist]

Another great Q out!! ACAS has excellent cash flow and is making enough $$$ to pay a dividend if the price ever recovers to the point that the divi makes sense, rather than buying back shares well below book value. Until then, I love the buyback plan and am fully in favor at buying back as many shares as possible at prices way below NAV.

[Prudent Capitalist]

Great Q out after the close yesterday. I really like the continuing share repurchases and planned continuance of authorized plan to buy back large amounts of stock at levels below 85% of current NAV, which continues to grow exponentially with the re-purchases of shares. of course, the spin-off and sale of American Capital Income is designed to lead to the payment of regular above-market dividends at some point. All great stuff!

[pappi]

Same here, PC. Just not convinced that bailing and moving on would do anything more than generate taxable gains. I'd planned to let ACAS run a year of dividends, DRIPed, and then see what's up.

BDCs are generally tanking, and I'm prone to contrarian gambles. Lots to read up, think about, and sit around, wait.

best,
pappi

[Prudent Capitalist]

I am still holding very significant positions here. Averaged down quite a bit, but what I like the most is all of the shares being bought back under NAV. I say keep buying in the shares as opposed to paying the fat divi, so long as the PPS is significantly under NAV,

[pappi]

I'm still holding the lot of 'em to see what gives in the end....lol

-p

[betahighlander]

thank you for letting me know. A know of a few investors who used to trade there. Now in Fnma and fmcc. I will let them know.

[Prudent Capitalist]

ACAS perking back up. And, I see it as a huge positive that the company is resuming its share re-purchases at levels considerably under NAV.

[Prudent Capitalist]

ACAS looking strong and like it is wanting to run again. I like the decision to reinstate the share re-purchases at levels substantially below NAV.

[Prudent Capitalist]

Nice gains for ACAS today in an overall down market, and up sharply in after-hours trading.

[pappi]

Seems down today, but yes. And proof of life on this Board.

-p

[Prudent Capitalist]

+1.8% today! Great news on the reinstatement of the share repurchases. I agree totally with the position of the Board that ACAS set aside funds each quarter and that those funds should be used to buy back shares so long as the stock is trading at a significant discount to Net Asset Value (NAV), with the shift to paying it out in dividends in any quarter where the share price is trading at or above NAV

[pappi]

Where did everyone go? No chitchat about the cc? Where art Thou Trinity?

- p

[pappi]

Great conference call, good set of slides.

I wonder where Trinity went, s/he was waiting for this day like so many others.

-P

[pappi]

Indeed. Mrs. and Mr. Market are pleased. And we shareholders will likely be going forward. Been a bit of a wait, PC.

- p

[Prudent Capitalist]

Market likes NEWS and developments with upside earnings surprise and Split into 3 separate companies.

[pappi]

Zack's hints at spin-offs...

http://finance.yahoo.com/news/american-capital-repositions-finance-spin-210626986.html

> It is an odd piece, since they praise ACAS, hint at great future developments, note serious work to recover from the 2009 hit, and then conclude by noting Zack's carries ACAS at a strong sell ranking.

But this is the first public hint I've seen about what ACAS long-term holders have been holding for.

Best,
pappi

[pappi]

I'd just like to note that the ASK on Ihub streamer for ACAS is at 18.49 before the market opens today.

dreams are important, too.

-p

[pappi]

Hey PC:
Indeed, nice to see...been away. Be great if a dividend resumed, too. But nothing wrong with a steady, substantial recover of price per share relative to NAV over the period.

What happened to Trinity? lol....

Best,
pappi

[Prudent Capitalist]

Nice to see some buying today. Wonder when we will hear some details on the direction the company intends to take on the re-structuring?

[pappi]

Lots of legalspeak, but a reorganization request to SEC has been filed:

http://ir.americancapital.com/phoenix.zhtml?c=109982&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTk2NDM0MzImRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d#tx738878_4

> someone spotted this on the Yahoo message board. It is given in an ACAS website SEC link, but has yet to appear on the Yahoo stock SEC filing webpage.

-p

[pappi]

ACAS holding up rather well after earnings report and conference call. No specs on slicing/dicing firm, but interesting queries about things seeming to head that way.

No talk at all of dividend re-enstatement, as I recall. That usually comes up in some shape or form.

> stll seems a long-term hold of merit.

GLTA, pappi

[Prudent Capitalist]

The news is all good. Nice huge chunk of shares bought back this quarter is positive, and the market likes the news.