Brookfield SwapGot an offer from Brookfield to swap Class A voting shares for Class A-1 non-voting shares. What’s your take on this?
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Brookfield companies have done well for me, but it’s always been hard to get one’s head around the changing corporates structures. First BAM spun out BN and now this latest opportunity. I too would welcome insight as to the wisdom of tendering my Brookfield stock to the offer.
I wrote some about that in last week’s Friday File — the short answer, since BN and BNRE are fully exchangeable for each other and aren’t really separate entities at this point, is that there’s no particular reason to exchange BN for BNRE… but also no particular reason not to, I suppose. I’m just holding BN (and BAM), the only BNRE shares I own are the ones created by the original spinoff — I wouldn’t be surprised if Brookfield tries to really crate BNRE as a separate business in the future, more like BAM, since it’s growing so quickly, and maybe this exchange offer is their way of gauging interest for a possible direct BNRE equity raise at some point, or using BNRE for future acquisitions, but BN is so undervalued right now that it’s hard to imagine them doing dilutive offerings as long as BNRE and BN are still essentially the same stock, as is the case today.