Subject: BN Valuation
Brookfield asset management (BAM) 75% 37,813 (3/15/23 market quote)
Brookfield property group (BPG) 100% 31,868 (IFRS)
Brookfield renewable energy partners (BEP) 48% 9,563 (3/15/23 market quote)
Brookfield infrastructure partners (BIP) 27% 9,188 (3/15/23 market quote)
Brookfield business partners (BBU) 65% 2,511 (3/15/23 market quote)
Corporate cash and financial Assets 2,893 (IFRS)
Insurance Solutions 3,996 (IFRS)
Energy contracts 639 (IFRS)
Other unlisted 2,855 (IFRS)
Corporate borrowings/Interest expense -11,390 (IFRS)
Net Working Capital* -944 (IFRS)
Preferred shares -4,375 (IFRS)
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Common Shareholder's Equity 84,617 million
Market Capitalization 46,896 (3/15/23 market quote)
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Observations:
1. Market cap is 84,617 - 46,896 = 37,721 less than the blended common shareholder's equity. That's a 45% discount.
2. Assuming BPG IFRS is the primary issue, market is valuing BPG at 31,868 - 37,721 = -5,853 million!
3. In 2022, BPG had FFO of 953 million and disposition gains of 791 million.
4. Management thought they were getting a bargain when they privatized BPG at 70% of IFRS (31,868).
Questions:
Are my numbers wrong? How can BPG be worth negative 6 billion? Even during the height of the pandemic, BPG fell to 9 and change, but not zero! What are we missing?