Steel Parners: Still selling at a substantial discount
Management at Steel Partners continues to try and simplify the LP structure, or rationalize the holdings, as they say. Two minority holdings have been fully acquired; API has been substantially purchased, and this past week HNH acquired JPS. Unfortunately, management’s efforts have not yet been rewarded in terms of a narrowing of the discount to NAV. On the contrary, the unit price continues to languish slightly above last year’s tender offer price, while the NAV continues to increase.
This is a quick post to simply point readers to the shareholder letter released in May that shows management’s (I believe conservative) estimate of the partnership’s NAV. You can view it here. Most holdings are valued at their public market prices, which I believe are substantially undervalued due to a ‘control’ discount. Also note that Webank is estimated at book value though it achieves outsize returns. With all of this the discount to management’s estimate of NAV is over 30%. What’s next? Another tender offer? I wouldn’t mind! My only fear here continues to be the creeping takeover of the company as management rewards itself with units.