Bombardier founding family to profit from BRP’s first dividend and sale of shares

Bombardier founding family to profit from BRP’s first dividend and sale of shares

MONTREAL — Bombardier’s controlling family will soon receive a multimillion-dollar return from its investment in BRP Inc., a recreational products manufacturer that was spun off as an independent company from Bombardier Inc.

The Beaudoin-Bombardier family, which owns 41.2 million multiple-voting shares of BRP in addition to its holdings in Bombardier, will receive $3.3 million from a new quarterly dividend to be paid by BRP next month.

The family could also earn up to $129 million by cashing in some of its BRP stock as part of the snowmobile maker’s plan to buy back and cancel up to $350 million worth of shares.

Affiliates of U.S.-based Bain Capital — which helped the family buy BRP from Bombardier — will also receive dividends and participate in the stock buyback. Bain currently has about 31.7 million BRP shares.

Both controlling shareholders, which together own 65.3 per cent of BRP shares, intend to sell some of their stock to maintain their proportionate holdings after the company buys back shares before the end of July. The price per share will be determined through a Dutch auction process.

BRP chief executive Jose Boisjoli said the family and Bain — which collectively control the company through multiple-voting shares — will be involved equally in the share buyback.

BRP’s publicly traded shares (TSX:DOO) reached an all-time high of $37.87 early Thursday after the dividend, buyback and financial results were announced. The stock was up 13.1 per cent at $37.17 in afternoon trading in Toronto.

The maker of Ski-Doo snowmobiles, Sea-Doo watercraft and other recreational equipment raised its growth estimates for fiscal 2018 after posting record first-quarter revenues.

The company also posted a first-quarter net loss, but attributed that to the impact of unfavourable currency fluctuations on the value of its long-term debt.

Boisjoli told analysts before the company’s annual meeting that its financial capacity and flexibility “has sufficiently increased to deliver on our growth objective while enhancing the return to our shareholders.”

BRP had a net loss of $19 million or 17 cents per share for the period ended Jan. 31, compared to a year-earlier profit of $110.7 million or 96 cents a share. Revenue rose to $956.2 million from $929.9 million.

On an adjusted basis, BRP said it had normalized income of 25 cents per share, better than the nine cents per share forecast by analysts polled by Thomson Reuters.

Chief financial officer Sebastien Martel said BRP’s initial dividend will be adjusted as the business and its profitability grow.

“Our objective is to continue to provide good returns to shareholder, and we will be adjusting the dividend payout in line with the results that we will be delivering,” he said, adding there is no targeted payout.

BRP hiked its guidance for the year. It is now expecting revenue from all business units will be four to six per cent above fiscal 2017 — four percentage points higher than previous guidance.

Similarly, BRP raised its adjusted net income growth forecast to a range of between 10 per cent and 16 per cent, from the previous range of seven per cent to 13 per cent.

Ross Marowits, The Canadian Press
Couillard says now is the right time to resume constitutional discussion
June 1, 2017, 2:22 PM

QUEBEC — Canada’s “historic” 150th birthday is the right moment to resume constitutional discussions, Quebec Premier Philippe Couillard told The Canadian Press in an interview.

Couillard, a staunch federalist, committed to reopening constitutional dialogue on Thursday, with the long-term goal of restarting negotiations that could lead to Quebec finally approving the 1982 Constitution.

The premier said while the issue took a backseat to economy, finances and healthcare for the first half of his mandate, he would have been disappointed had his first term finished without tackling the subject of Quebec-Canada relations.

“That’s why we were elected, but also to do things like this, to have proposed to Quebecers and Canadians — but to Quebecers above all — the affirmation of who we are and a path to regain contact with the rest of country, that’s a part of the full job of a premier for me,” Couillard said.

While there is no timeline or definite plan for opening constitutional negotiations, Couillard is hopeful the vast coast-to-coast discussion he is launching will eventually lead there.

On Thursday, Couillard unveiled his government’s official policy on the place of Quebec within Canada. The 200-page document defines Quebec as an inclusive, francophone nation with control over its own institutions and — Couillard believes — a place within Canada.

While Quebecers may not get up every morning questioning the state of the federation, he said it’s false to say such questions don’t interest them.

“In the heart of each Quebecer, this sense of identify and belonging to the Quebec nation is so strong, and it goes through generations and generations,” he said. “So the illusion that this issue will just disappear on its own … is just an illusion.”

For Canada’s 150th birthday, he said Quebec’s “gift” is to open the door to dialogue — with the other provinces, with social and environmental groups, with chambers of commerce and universities — in order to help the rest of the country better understand Quebec’s claim to nationhood.

While it’s a long process, Couillard said he’s “very confident” the outcome will be positive.

One day the Constitution will be modified, the premier added, and it would be “a great pride, for sure,” for him to have played a part, big or small.

He said the process actually began over a decade ago in the aftermath of the 1995 Quebec referendum, when government and courts began to recognize Quebec as a distinct society and granted it greater control over immigration and health.

Couillard said he’s encouraged by the attitudes of youth today, who grew up in a globalized world and seem to feel a sense of belonging to both Quebec and Canada.

He’s also hoping to include First Nations in all the future discussions.

In this new context, Couillard believes Quebec’s separatist movement is doomed to failure.

“There won’t be a majority of Quebecers who want to abandon their Canadian citizenship, why would they?” he said. “A G7 country, a citizenship that is envied all over the planet, a free and democratic country. There’s no oppression in Canada, people want to keep their Canadian citizenship. It’s the biggest fundamental weakness in the separatist project.”

Quebec was the only province not to sign the Constitution in 1982 and two subsequent attempts to negotiate new terms for the province ultimately failed.

When another round of negotiations does happen, Couillard believes they will be nothing like the closed-door discussions of the past.

“It couldn’t happen like that anymore,” he said.

“The nature of Canadian democracy … is such that people want to participate. People want to hear, people want to understand and don’t want to be left out of that.”

Caroline Plante, The Canadian Press

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