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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Mr_X who wrote (15020)	3/22/2001 10:29:16 AM
From: Andrew	Read Replies (1) \| Respond to of 18998

1) In my years of investing in the entity, I don't believe that any 'sneaky' action was taken to benefit his own self interest to detriment of shareholders. Unlike most managers of companies you own, he has substantial and real hard money invested in the same equity as everyone else and I will add is deep in the hole as everyone else. Note to the extent you didn't like inherent conflicts of interest, combining the companies greatly addresses the concern. (eg- you asked which company to invest in-(see below) at the end of the day, I am pleased to say it will not be a question necessary to ask). The difference for cotter and you/I is that he has received annual payments (not outrageous amounts) while he took longer than any of us wanted to deploy and invest company's cash. Some of that delay was beyond his control and are barriers to entry that now serve to protect our assets. Other delays were due to his own bearishness and last but not least other underperformance of the assets are due to undermanagement. No one has ever said that Cotter was good business manager-few bottomfishers like him are- (but the crg/rdge/cdl discounted value MORE than accounts for this) By the way, while other exhibitors blew up and destroyed much of their asset value, this empire's asset values remain far less deteriorated and most of that is reversible mark-to-market currency decline in Australia. 2) where do his interest's lie- well he has personal money in CRG and CRGpfd which owns/controls so much RDGE that de-facto he has as much personal money in RDGE. As a result of this summer's asset infusion into CDL, he now has real money in CDL as well. 3) which one to buy? first, I own all 3 and in SIZE. At the end of the day, it looks like there's just going to be CDL. So I am most happy that the main 'value impediment' is being addressed. reduction of complexity and creation of simplicity;- there will only be one to chose to buy or not; reduction of related/affiliated party transactions and rebuilding of trust with you and rest of investment community; combining several small companies into 1 larger company- better chance to be on someone's-anyone's radar screen. Also increased liquidity. (If cdl shares are issued at mkt value of both crg and rdge, less all the shares of CDL owned by CRG and RDGE there may around 20 million CDL shares outstanding) few ways to play it- appealing to arbs and value investors alike a) immediate arb between crg and crg pfd- these securities are economically equivalent (but for voting rights). Yet common shareholders have always been in minority to cotter anyway. In addition, Cotter has been on record several times saying there is no difference between the two and a few years back issued crg pfd to crg common holders as equivalents. Also, crg pfd has $6/share liquidation preference over common. If the securities are getting CDL stock, its no different than cash deal. Thus until they are in parity, arb of equal $ DOLLARS short common and long crg pfd would create net long shares of CDL on completion of deal for free. Note, once the definitive terms of ratios are out crg and crg.pfd spread will vanish in a heartbeat. b) value long play- Stub CDL on combined company is extraordinarily cheap (note release- combined book value of $100MM at 12/31 does not include the likely gain from acquiring 'minority interests' of crg/rdge at market price far below their book values- that gain will add to the $100MM) but its always cheaper to play stub via owning target. Thus RDGE and whichever is cheaper of crg.pr or crg common are best way to play this as value long.