OK, it seems some people are condemning the AVB board for not rejecting the OZL offer.
Dreadful directors, they claim indignantly .. it's all a conspiracy.
So let's examine the opposite scenario.. where the board had rejected it and the outcome.
Despite the recent SP being 7.7c and the average of the most recent seven broker valuations being around 17.4 c give or take... still in light of those two supporting factors, the very brave AVB board rejects the credible (if low) 17c on behalf of shareholders. A bid at more than twice market price. Well done.
So let us presume that everybody then listened to the Board (and some smart HC's), and nobody accepts OZL. That is after all what is being hysterically screamed here... don't accept!
That wish is granted.
.. so nobody and I mean nobody accepts at 17c. Great. A HC win. No other bidder emerges.
OZL do not achieve their 50.1% and withdraw their offer... or maybe claim some other out. That makes everybody happy!! We proved our point.
With the takeover collapsing the SP immediately retreats to say 8.0c.
Oh joy... what great folk these directors are. They have made their point that 17c is not enough.... at our expense. The 17c has vanished and the new Mercedes too.
Not only that... what other company would want to even look at AVB then.
The board standing behind some "Valuation" of 23c say.. a group of shareholders who reckon they can lord it over the Big Boys who were doing this nefarious takeover stuff when they were still in nappies.
AVB has a massive, massive looming problem.
Project Finance. $90 +$140m = US$230m. One poster dismissed it out of hand, brushed it aside.. easy.. no problem. I disagree.
Debt or Dilution. Take your pick. It was pointed out in AVB's risk statement, so I do not need to repeat it. And only that obtained after maybe a very long period.. I remember Antas North financing. Who wants dilution at an AVB price of 8.0c. Crazy.
I was very optimistic of another bid, as is known. I am now not confident of it. That is sad. It is being made harder for any other suitor.. how clever!
As directors you either get behind it 100% or reject it. As it was a credible bid... and with a careful consideration of all the implications... it was the only decision. It offered protection from the above unpleasant scenario.. and a chance for a good return for shareholders.. should they wish it.
What others do is their business. I really don't care, except for a some good friends I have made here in this forum.
Shred the documents by all means.... but consider the implications of being a shareholder in a post-takeover AVB. It may not only be the documents that get shredded.
You are dealing with some very smart and very experienced people... trying to be smarter than them, comes with some considerable risk.
AVB Price at posting:
16.0¢ Sentiment: Hold Disclosure: Held
