Ontario's Sovereign Wealth Fund, OMERs, is at it again

I think it would be most insightful if someone from the news media would look up the definition of the word “arbitrage”. Doing so would be very instructive since it would explain why OMERs is buying Teranet and also why OMERs bought Golf Town Income Fund.

None of this is complicated.....just intellectually corrupt.

You see, as a public trust held by taxpayers, Teranet will be subject to an additional 31.5% tax on top of the 38% tax that investors already pay. Meanwhile as a private trust held by OMERs it will not. That’s Harper’s idea of a Tax Fairness Plan. Sovereign Wealth Funds like OMERs Teachers et al are exempt from Harper’s draconian tax, while the 75% of Canadians who do not belong to such lofty pension plans are not.

Sounds fair......provided you live in North Korea.

Knowing the Canadian business media to be infinitely lazy....here’s the definition of arbitrage:

1. Finance. the simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices or values, for example caused by arbitrary disparities in tax treatment afforded different classes of security holders


UPDATE 1-OMERs Borealis Infrastructure to bid C$2 bln for Teranet
Thu Sep 4, 2008 8:44am EDT

TORONTO, Sept 4 (Reuters) - Borealis Infrastructure said on Thursday it will offer more than C$2 billion ($1.9 billion) in cash for Teranet Income Fund (TF_u.TO: Quote, Profile, Research, Stock Buzz) after a string of bids in recent years to acquire the company have failed.

Borealis intends to offer C$11 per Teranet unit, about a 27 percent premium over the volume-weighted average trading price of the units in the 30 days up to Aug. 27, the day before speculation surfaced about a potential deal.

Toronto-based Teranet provides access to the Electronic Land Registration System and pockets a share of a fee every time a house changes hands in the province.

Since 2007, Borealis, the investment unit of OMERS, one of Canada's largest pension plans, said it has made three proposals to Teranet to enter into negotiations to buy all of its units or assets but has not been able to advance discussions.

"We believe it is in the best interests of Teranet unitholders as well as our own stakeholders to make this attractive offer directly to unitholders now," Michael Rolland, chief executive of Borealis, said in a statement. "We also plan to redeem Teranet's existing bonds upon successful completion of the transaction."

($1=$1.06 Canadian) (Reporting by Frank Pingue; Editing by Frank McGurty)