Fairfax posts realized gains in advance of D&O share purchase

Fairfax Financial Holdings CEO Prem Watsa has released information on the company’s third quarter realized gains in advance of an expected move by Fairfax directors and officers to buy additional company shares.
To date, the company has realized pre-tax gains of approximately $250 million on its investment portfolio. About $215 million of this comes from the sale of bonds. Further gains could be realized before the end of the quarter.
The company also holds S&P puts valued at US$500 million, with an average strike price of 986, with most contracts maturing by the end of the year.
Watsa released the information after announcing that the company’s officials, including himself, may purchase further Fairfax shares on the market.
At the same time, the company has also announced a normal course issuer bid for up to one million of its subordinate voting shares through the Toronto Stock Exchange. Shares to be purchased for cancellation represent less than 10% of voting shares.
“Fairfax is making this Normal Course Issuer Bid because it
believes that in appropriate circumstances its subordinate voting
shares represent an attractive investment opportunity and that
consequently purchases under the bid will enhance the value of the
shares held by the remaining shareholders,” states a release.
The bid will begin September 20, 2002 and potentially last for a year. The company has had a similar bid in place, set to terminate on September 19 of this year. Through that bid, Fairfax bought 210,020 shares at an average price of $124.32.