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Mergers, Windfalls & Canadian Trusts
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Thursday, 11 October 2007
Just last week PrimeWest Energy Trust “unitholders” were handed an all-cash bid of CD26.75 per share.
And their U.S. investors get a WHOPPING PREMIUM of close to 40% over the pre-deal share price.  This bears repeating—a premium of 40%.  Now that’s something you can take to the bank!
And the PrimeWest deal is just the opening salvo.

It’s not too late to buy value trusts that are prime acquisition targets with huge cash premiums to investors. Global capital has billions to expend and cash-rich Canadian trusts are too tempting to pass up. Especially now, when these rock-solid businesses are as cheap as they’ve ever been.

But first, you probably want to know how this solid gold investment egg landed on our plate…How the Canadian trust became the high-yield “bargain” that it is today with global capital suitors. To do that, I need to take you back to Halloween night, 2006.


He Stuck Out His Tax Thumb and Now, Gives Investors a Plum!

It was on Oct. 31, 2006, that Canadian finance minister, Jim Flaherty, told the world he wanted to tax SOME income trusts in 2011. Some U.S. investors gave their Canadian holdings the heave-ho BEFORE reading the fine print.

It’s been a year since Mr. Flaherty’s big Halloween “boo” and income trusts are still churning out monthly dividend checks with 10%-21% yields.

And, thanks to Mr. Flaherty’s foibles, prices on Canadian income trusts are rock-bottom for investors and GREAT acquisition targets! But not for long. The time to look at Canadian trusts is now.


I do not want to rush you. But it will be a long, long time before you’ll be able to again buy these cash-rich businesses on the cheap. There’s just no way to lose. AND WHAT AN UPSIDE. Again, dividends 10%-21% and monthly checks.
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Happily for investors, here we go ‘round again!

There’s a new player on Canada’s trust field and it's handing mighty windfall profits to astute investors. And that new player with cash spilling out of both fists is foreign capital. Many investors are waking up to find their cash cows up 30% or more in a day as foreign capital firms realize the true value of trusts.

For instance:

UE Waterheater is far from a household name in this country. But anyone who heeded Canadian Edge’s buy recommendation on this trust raked in a premium of over 50 percent when Australian conglomerate Alinta bought it for $22 a share in CASH—well above any price UE had ever traded for.

There’s plenty more opportunity here since global capital still has $2 trillion up their sleeve, and right now, they’re circling over a dozen income trusts.

While I cannot promise that every trust in the Canadian Edge portfolio will hand you a windfall, I know you can see the upside if you get in now.

How Have Income Trusts Rewarded Investors? Just a Few Examples:


  • Enerplus Resources was worth just $9 million at its start 19 years ago, yet now is worth $6.2 billion. Considering that it has returned 85% of its earnings to shareholders (which Canadians call “unitholders”) in the meantime, that’s incredible growth.
  • In the last three years, Arc Energy Trust buyers have seen their opening ante grow 219% while their dividends have soared also. That’s what I call “playing both sides of the street.
  • It’s not only energy  trusts that have made the big gains. For one instance, RioCan, a hotel trust in the REIT sector, has awarded its unitholders an 18.98% annual return for the past 10 years. Compounded, that’s a total of 461%. And in the meantime, its monthly dividend has nearly doubled.
  • The few trusts that have been around for a decade or more have produced some breathtaking gains. Take Vermilion Energy Trust. Since its inception in 1994, it’s up an astounding 20,174%. That’s 202 to 1.  The original unitholders have seen each $10,000 investment explode into $2,147,000, not including dividends. I hate to point out the obvious, but this is truly life-changing wealth! 

When you take advantage of my service, you get instant, online access to the best trust buys. I give you prices and yields in U.S. dollars.  No guesswork about what you’re buying; it’s all in front of you.  Plus, my online Subscriber’s Guide has everything you need to get you up and running. (And you can e-mail your questions to me—I WILL answer you.)
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