Upon announcement of the proposed transaction, Hydro One (TSX:H) shares felt the usual acquiror pain on the first day of trading. However, since then the shares have recovered and are not "basically flat" but are "exactly flat".
Very unusual in trading that such a steady share price has been maintained. What does this mean?
First of all, the dividend for shareholders will be maintained. That means the business of Hydro One will have to be managed with this in mind. However, this is where things become curious.
Don't forget the Ontario Liberals headed by " The Kathleen" and her Merry Band of Taxing Liberals are also a shareholder. As such, the Ontario government will also receive dividends in addition to the extra delivery charges, carbon taxes etc that are showing on your bill every month.
The Ontario government also controls, sets and allows the prices to be charged for a utility (ie electricity). As a shareholder, will the Kathleen allow a dividend to be forgone for the greater good of Ontarians? In other words, the Kathleen will allow and approve price increases such that Hydro One (and its Ontario territory) is guaranteed a profit and even further allowed operate without the loss of jobs as most "real" businesses ( publicly listed companies ) have to face when dealing with a "real" income and cash flow statement.
Buy Hydro One for the safety of the dividend because you might as well benefit from the higher rates coming to support this conflict ridden, pseudo - communist operating regime that we see in countries like China and Russia.
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