Yeah, I was lucky to get out of the hybrids a few days ago ......

Yeah, I was lucky to get out of the hybrids a few days ago ...

Not sure how there can be any positive read through on this. With the Canadian business sold for tuppence, the pro-forma business is now massively burning cash. Not sure what the thinking there was - either the banks forced them to sell, or management are atrocious capital allocators. Either way, its not good.

And if 4x EBIT is what you get for a 'good asset', honestly whats the best-case valuation for the Europe business, even if they somehow do the hard slog to get the business to 1-2% EBIT margin ( which seems unlikely, given they are now operating with Sword of Damoclese over their head).

Terrible management of the situation all around. Paperlinx management should have sold the European business a long time ago, even if it got almost nothing for it. Also, the UK business has massive NOL assets with no expiry - surely these are valuable to a potential acquirer!

And if management hadn't tried to shaft hybrid holders (and waste millions in fees to Moelis in the process) and a more realistic exchange ratio proferred, then at least they could have cleaned up the capital structure, and made PPX a more attractive acquisition target. Can't imagine any potential acquirer would want to deal with the hassle of dealing with two separate class of owners. They'd probably rather wait to buy the assets in a bankruptcy court.