Archives: News

Toronto, Ontario – Friday, July 6th, 2012 – Urbana Corporation has now completed the purchases allowed under a Normal Course Issuer Bid (“NCIB”) for 6,636,033 of the company’s Class “A” shares (TSX: URB.A).

 

The buyback and cancellation of these shares, combined with the previous amount authorized and purchased now totals 17,150,953 “A” shares, leaving 60,375,067 “A” shares outstanding.

 

Urbana Corporation will be able to re-apply for further NCIB purchases in late August 2012.

 

Urbana’s investment portfolio now combines publicly traded and private holdings, with a current focus on financial services.

 

On behalf of the Board of Directors.

 

Please contact Elizabeth Naumovski, Investor Relations at 416-595-9106 for further information.

 

 

CLARIFICATION RE ABOVE PRESS RELEASE: All of the above shares purchased were bought at discounts from asset values ranging from $0.65 to $0.82 per share.

Toronto, Ontario – Thursday, June 28th, 2012 – Urbana Corporation (“Urbana”) (TSX: URB, URB.A) is pleased to announce the purchase of 15.6 percent of the outstanding equity of Caldwell Financial Ltd., the holding company for Caldwell Securities Ltd., Caldwell Investment Management Ltd., Caldwell Insurance Services Ltd.

 

This transaction has been approved by an independent committee of the Board of Directors in accord with a Fairness Opinion provided by Macquarie Capital Group Limited. All regulatory approvals have now been received.

 

Urbana Corporation will continue to seek private acquisitions within the financial services sector valued at or near book value.

 

On behalf of the Board of Directors.

 

For further information please contact Elizabeth Naumovski, Investor Relations at 416-595-9106.

Toronto, Ontario – Friday, February 3rd, 2012 – Globe and Mail – Finding blue chip bargains in closed-end funds.

 

Here is an opportunity investors should salivate over: Buying $1 worth of stock for the bargain basement price of 70 cents, or even less. A sale on stock prices sounds too good to be true? Not at all, if you look at one of the more obscure areas of the Toronto market, a group of securities known as closed-end funds.

 

Closed-end funds resemble their better-known cousins, mutual funds, but with a twist. Closed-end funds trade on a stock exchange just like the shares of ordinary companies, and generally aren’t immediately redeemable into cash the way that a mutual fund unit is. That means they often trade at levels well above or well below their breakup value, or the amount of money available for distribution to owners if the funds were wound down and the assets liquidated.

 

Consider United Corporations Ltd., (UNC-T50.370.320.64%) a closed-end fund chock-a-block with conservative, blue chip names, many of them selected by the investment pros at famed money manager Jarislowsky Fraser. Yet its shares trade at a 31-per-cent discount to liquidation value, in effect offering investors the fabled $1 worth of stock at a price of only 69 cents.

 

Urbana Corp., (URB-T1.060.010.95%) a fund that invests in the shares of stock and commodity exchange operators, does even better. It trades at a whopping discount of 42 per cent to its breakup value.

 

Urbana and United Corporations aren’t isolated cases of extreme undervaluation. Fully 22 of the more than 170 closed-end funds on the Toronto exchange trade at double-digit discounts to their liquidation value. Among them: CMP Gold Trust, Copernican British Banks, Canadian World Fund, Economic Investment Trust, Canadian General Investments and Coxe Commodity Strategy Fund.

 

For investors, finding funds available at discounts is easy because there are so many of them. The full list of funds, and the comparison between their market price and breakup value, is published on The Globe and Mail’s Globe Investor website.

 

The big question to answer before plunking money down in them is whether the discount is justified, and whether factors exist that could make the discount narrow, preferably through a rising share price.

 

Those involved in the closed-end fund business say that because of the discounts, their offerings are often superior to mutual funds, which are heavily promoted for the sales commissions they generate for brokers and not necessarily because they’re the best price deal for investors.

 

“The mutual funds industry is a very big machine, which has something that is sold to people rather than bought by people,” says Michael Smedley, who manages the Canadian General Investments closed-end fund.

 

Mr. Smedley’s CGI trades for a 25-per-cent discount. He says many savvy investors are attracted to the closed-end fund sector because it provides nimble market players the opportunity buy good assets on the cheap.

 

Closed-end funds are typically pint-sized, considered small caps in terms of their market capitalization. That means institutional investors with their big buying power don’t generally purchase them, although many have adequate liquidity for retail investors to take positions.

 

Why closed-end funds often don’t trade at their net asset values is a hotly debated point, but most explanations come down to the same simple demand-and-supply fundamentals that determine day-to-day security prices in general.

 

When markets are ebullient, closed-end fund discounts tend to narrow or move to premiums as share buyers flood in. Urbana, for instance, traded at a massive 60-per-cent premium in 2007 to its breakup value as investors clamoured to take positions in the then red hot stock and commodity exchanges sector.

 

During downturns, when investors flee the market, or when individual sectors go out of fashion, the discounts typically widen, often to unjustifiable extremes.

 

With the recent financial panic cooling interest in the shares of exchanges, Urbana, the former market darling with a huge premium, now trades at the largest discount available on the Toronto market.

 

Over the last three years “exchanges have been just totally brutalized,” says Thomas Caldwell, Urbana’s president.

 

The bulk of Urbana’s investments are in shares of NYSE Euronext, the operator of the New York Stock Exchange, and commodity exchange operator CBOE Holdings Inc., two safe, liquid investments. Mr. Caldwell says investors would be crazy to buy the shares of the exchanges directly when they can buy them through Urbana “at a monster discount.”

URBANA CORPORATION – NOTICE OF INTENTION TO PURCHASE SHARES Toronto, Ontario – August 25, 2011 – Urbana Corporation (“Urbana”) (TSX: URB.A) announced today that the Toronto Stock Exchange (the “TSX”) has accepted its notice of intention to conduct a normal course issuer bid to enable it to purchase up to 6,636,033 of its non-voting Class A shares (the “Class A Shares”), representing 10% of the public float, pursuant to TSX rules…

 

Purchases under the bid may commence on August 29, 2011, and will terminate on the earlier of August 28, 2012, the date Urbana completes its purchases pursuant to the notice of intention to make a normal course issuer bid filed with the TSX or the date of notice by Urbana of termination of the bid. Purchases will be made on the open market by Urbana through the facilities of the TSX in accordance with the rules and policies of the TSX. Caldwell Securities Ltd. will make all purchases pursuant to the bid on behalf of Urbana. The price that Urbana will pay for any such shares will be the market price of such shares on the TSX at the time of acquisition. Class A Shares purchased under the bid will be cancelled. Urbana will not purchase in any given 30 day period, in the aggregate, more than 1,340,222 Class A Shares, being 2% of the 67,011,100 issued and outstanding Class A Shares as at August 24, 2011.

 

As of August 24, 2011 Urbana has purchased 7,431,300 Class A Shares on the open market pursuant to a notice of intention to conduct a normal course issuer bid accepted by the TSX on August 26, 2010 at an average purchase price of $1.2670 per share.

 

To the knowledge of Urbana, no director, senior officer or other insider of Urbana currently intends to sell any Class A shares under the bid. However, sales by such persons through the facilities of the TSX may occur if the personal circumstances of any such person change or if any such person makes a decision unrelated to the bid. The benefits to any such person whose shares are purchased would be the same as the benefits available to all other holders whose shares are purchased.

 

Urbana believes that the market price of its Class A Shares at certain times may be attractive and that the purchase of Class A Shares from time to time would be an appropriate use of corporate funds in light of potential benefits to remaining shareholders.

 

Please contact Elizabeth Naumovski, Investor Relations at 416-595-9106 for further information.

 

 

Forward Looking Statements

 

Certain statements in this press release constitute “forward-looking” statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Urbana to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Unless required by applicable securities law, Urbana does not assume any obligation to update these forward-looking statements.

Toronto, Ontario – April 13, 2011 – Certain Caldwell Financial Ltd. (“CFL”) shareholders (the “Joint Actors”) and Thomas Caldwell (“TSC”) have each terminated voting trust agreements (“VTA”) and right of first offer agreements (“ROFR”).

 

The agreements respectively granted (1) TSC a power of attorney to vote the Urbana Corporation (“Urbana”) common shares beneficially owned by the Joint Actors which are subject to the voting trust agreement; and (2) TSC a right to make an offer to the Joint Actor in the event the Joint Actor decided to sell any Urbana commons shares beneficially owned by the Joint Actor.

 

As the result of the termination of the VTA, the number of common shares controlled but not owned by TSC has decreased from 528,061 common shares or 5.28% to 137,700 common shares or 1.37% of Urbana’s total outstanding common shares.

 

The number of common shares owned directly or indirectly by TSC remains at 4,231,161 representing 42.31% of the outstanding common shares.

 

Please contact Thomas S. Caldwell, Chief Executive Officer at 416-595-9106 for further information.

Toronto, Ontario – Friday, April 1st, 2011 – Urbana Corporation (“Urbana”) (TSX: URB, URB.A) announces that NASDAQ OMX Group Inc. and the IntercontinentalExchange Inc. propose to acquire NYSE Euronext (“NYX”) for $42.50 in a combination of cash and shares.

 

The proposed bid represents an approximate premium of 19 percent to the Deutsche Boerse proposal.

 

Urbana Corporation holds 1,800,000 shares of NYX, representing approximately 40 percent ($62.4 million) of Urbana’s investment portfolio.

 

Please contact Thomas S. Caldwell, Chief Executive Officer at 416-595-9106 for further information.

Toronto, Ontario – March 25, 2011 – Thomas S. Caldwell (“TSC”) has acquired 1,005,014 common shares of Urbana Corporation (“Urbana”) pursuant to a private agreement for $1.44 per common share.

 

As a result of this acquisition, TSC now owns 4,231,161 common shares of Urbana representing 42.31% of the issued and outstanding common shares.

 

Additionally, TSC has voting control over 390,361 common shares of Urbana, representing 3.90% of the issued and outstanding common shares, that are subject to previously disclosed voting trust agreements with several other shareholders of Urbana that are employed by Caldwell Financial Ltd. or its subsidiaries, and 137,700 common shares of Urbana, representing 1.38% of the issued and outstanding common shares, that are owned by entities controlled by TSC.

 

In total, TSC currently owns or controls 4,759,222 common shares of Urbana representing 47.59% of the issued and outstanding common shares.

 

Please contact Thomas S. Caldwell, Chief Executive Officer at 416-595-9106 for further information.

Toronto, Ontario – Wednesday, February 9th, 2011 – Urbana Corporation has now purchased, under a Normal Course Issuer Bid (“NCIB”), 7,526,320 of the company’s Class “A” shares (TSX: URB.A).

 

The NCIB purchases, over the past 10 months, represent a reduction of approximately 10% of the URB.A shares outstanding.

 

The URB.A shares were purchased on the open market at significant discounts from the company’s net asset value per share.

 

The shares purchased were cancelled and as a result the outstanding number of Urbana Class A Shares has been reduced to 70,000,000 as of February 8th, 2011.

 

Urbana’s Net Asset Value (“NAV”) per share is $1.94, as of February 7th, 2011.

 

Urbana Corporation is using the current share price discount from asset value (approximately $0.70 per share) to benefit existing shareholders.

 

Urbana’s investment portfolio now combines publicly traded and private holdings, with a current focus on financial services.

 

Please contact Thomas S. Caldwell, Chief Executive Officer at 416-595-9106 for further information.

 

 

Forward Looking Statements

 

Certain statements in this press release constitute “forward-looking” statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Urbana to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Unless required by applicable securities law, Urbana does not assume any obligation to update these forward-looking statements.

Business Standard / New Delhi January 28, 2011, 0:23 IST

 

Anyone who thinks a securities exchange is a “natural monopoly” is so out of touch with recent history and the reality of capital markets as to be certifiable.

 

Instead of focusing on liquidity, one should focus on the reasons for liquidity – cost of speed.

 

The natural monopoly of the New York Stock Exchange (NYSE) went from a market share in cash equity trading of approximately 85 per cent to roughly 30 per cent in a matter of a few years. The reason for this rested on their mutual ownership seeing the NYSE as a “natural monopoly” and failing to innovate.

 

The instant the new entrants came upon the scene, speed of execution and reduced costs obliterated NYSE’s dominant position. This was also the case with London and all across Europe.

 

The dominant exchanges failed to provide a better product, become more efficient or even attract the talent required to compete. Despite being the dominant market, liquidity simply moved to other venues.

 

This scenario was a direct result of the NYSE’s mutual ownership structure. I know, I was there.

 

Competition in the exchange space is brutal but has never resulted in reduced costs for investors. “Natural monopolies” only exist when governments will them into existence, often under the influence of those wishing to curtail competition.

 

Thomas S. Caldwell, CM Chairman Caldwell Securities Ltd.

The restructuring of India’s securities exchange environment recommended by the Jalan Committee does not address the real issues facing the capital markets.

 

Thomas S. Caldwell

 

The Jalan Committee’s recent report, Review of Ownership and Governance of Market Infrastructure Institutions, must be commended for recognising the importance of capital market structures in the development of India’s economy and their efforts to avoid the overly fragmented market environments of other countries, particularly America. That being said, what specific measures are necessary to achieve India’s economic goals while avoiding the destructive impact of unintended consequences?

 

In this comment, I will only deal with a few of the Committee’s recommendations which I feel will crepate significant problems for India’s exchanges and capital markets and, as a consequence, its economy. These relate to ownership, profitability and compensation.

 

Ownership

 

Before it’s public share offering, the New York Stock Exchange was typical of virtually all privately-or closely-held exchanges of the time. They functioned as utilities, the role now envisioned for exchanges by the Jalan report. The NYSE was then grossly inefficient and succeeded only as a result of little or no competition. It was a high cost trading environment which did not develop new products, capitalise on new trends or modernise its trading systems, and failed to adopt the most basic of good management practices. This was the NYSE of less than a decade ago. The changes since becoming publicly-owned and being faced with competition have been amazing. The NYSE has revamped its systems, caught up with the competitions speed of execution, reduced costs, developed new products, expanded accross the globe and has again become a world leader in the securities exchange space.

 

Publicly-owned companies, as a result of their accountability to a wide number of shareholders, must continually strive for efficiency and innovation. Corporate governance has also seen a quantum leap forward as a result of securities exchanges ceasing to be tightly controlled “old boys” clubs.

 

All over the world, the thrust of the auditing profession has been to make public-company reporting transparent, accountable and comprehensible to investors. These three factors are part of the reason that public companies are worth more than private ones. To allow securities exchanges to remain private would be to deny investors the benefit of the high standards which are being set for India’s public companies while standing as an implicit criticism of the listing process and public companies general. Possibly the NSE and BSE could cross-list on each other’s exchange if extra accountability is desired, but to not list at all makes everything that happens at exchanges more opaque to the outside world.

 

Publicly-traded companies have a currency both to expand and to attract better talent. Further, it can be shown that mutually-owned or closely-held companies have continually failed to successfully compete with publicly-held corporations. The Committee’s proposed constraints on public ownership will relegate India’s securities exchanges to provincial trading environments. There is an opportunity here for India to properly build the infrastructure in order to become a leading global financial centre, while enhancing the core economic functioning of its financial services sector.

 

Further, publicly-listed securities exchanges have traditionally raised a country’s profile on the world economic scene. They point to the rule of law, corporate governance and an investing culture. Brazil’s Bovespa Exchange is a clear example of a publicly-traded securities exchange raising the international awareness of its listed companies as well as its country’s vast potential.

 

The skills and economic weight exist in India. However, the proposed restrictions on securities exchanges’ financing possibilities will make real progress quite elusive. To avoid significantly negative unintended consequences, the focus should be on trading regulation and governance, not ownership. The former brings order, the latter, stagnation. When securities exchanges simply function as utilities, as in the past, capital market development always suffers.

 

Profitability

 

Constraints on the profitability of any industry are, in effect, contraints on growth and innovation. What is being proposed by the Jalan Committee is a series of constraints which are addressing problems unrelated to the securities exchange sector. Excess profits have not been a feature of any exchange that I am aware of, or can envision.

 

Profits result from numerous factors such as innovation, efficiency, management skills, technology breakthroughs or simply providing a better product or service. Regulating profits according to some formula based upon capital totally negates all of the above. There is no reason to do things better or differently.

 

Further, a profit constraint based on capital only rewards the largest entity in the field and constrains all of its competitors. Governments have never been the best judges of what a company requires in terms of the profitability required for growth, diversification, new opportunities or contingent risks. Also, profits may come in one fiscal period but growth or innovation possibilities can arise several periods later. Stripping profits now can and will reduce options later.

 

Diversification of securities exchanges both vertically (order entry to settlement and custodial) and horizonatally (new products), with resulting efficiencies, will be significantly reduced by the profitability and regulatory proposals of the Jalan Committee.

 

Compensation

 

Securities exchanges are in competition for good people as much as trading volumes. India, with its supply of bright technocrats and savvy business leaders, will become the net supplier of skilled people to securities exchanges around the world if the compensation constraints of the Jalan Committee are introduced. India should not become an exporter of its best and brightest in this key economic sector.

 

There is one basic fact which emerges from the Jalan Committee report and that is: If the report is adopted in its current form, the future of India’s economic growth will be traded elsewhere in the world. For example, Singapore and other exchanges already trade Indian securities anf that volume will increase proportionately, without benefit to India.

 

The report does not address the real issues facing India’s capital markets and is quite arresting from an international perspective. The contemplated constraints will have a significantly negative impact on the worlds view of India as an investment destination, while achieving no positive end at home.

 

Serious second thoughts must prevail regarding the overall consequences of this reversion to an older style of government policy which failed India in the past.

 

The author has been active in the securities industry for over 45 years, and is a past governor of the Toronto Stock Exchange. The organisation he heads is or has been one of the largest shareholders of the New York Stock Exchange and the Chicago Board Options Exchange, and has invested in a securities exchange in India.