Ann: BKW sells 5.9 million shares in WHSP raising $157 million, page-14

I think on balance this was a good move both in terms of timing and in the amount of shares sold.

At $26.42, the SOL shares were yielding BKW less than 2.2%. Even if you take into account the fact that SOL only netted 115M (after tax and other costs) instead of the full 157M sale proceeds, the effective earnings forgone on that 115M was 3%, whereas I expect that the bridging finance on the US brick operation purchase would be significantly more than that. I also think that the BKW directors probably considered that SOL shares are trading significantly above their intrinsic value at the moment and it was therefore prudent to take the opportunity to realise some of that value to help fund the US purchase. Interest rates are only likely to rise in the future which would not only increase the cost of interest on the borrowings, but is also likely to impact on the value of the SOL shareholding as its value in terms of yield will look increasingly stretched in comparison to rising risk free bond rates.

It is worth remembering that when valuing BKW's SOL shares, the deferred tax liability on the unrealised capital gain should be take into account (which is something I have overlooked in earlier posts).