Ann: Change of Director's Interest Notice- Mi, page-9

re: Ann: Change of Director's Interest No... r3067 & firsova

Thanks. I now recall that statement.

Firsova, I don't believe PE is circling PPX at all.

The Coastal interest is interesting and consistent with their modus operandi.

There is a strong argument that PXUPA will ultimately determine the future of PaperlinX. With Coastal now at 10.36% we have some interesting dynamics at work between two opportunistic investors.

If you accept that PXUPA holders presently hold about 69% of the equity in PaperlinX (64% actual at June 2012 and 74% forecast at June 2013) and this non-voting 69% is in preference to the remaining 31% then we have a case of the Prisoner's Dilemma.

Assume for one moment that magically there was a conversion of PXUPA to PPX based on 69/31 - ie no premium for sacrificing preference, and the role of two key players.

Coastal_______ 69% x 10.36% = 7.15% COST $4m
Allan Gray/Orbis 31% x 18.3% = 5.67% COST $77m

At 18.3%, Allan Gray cannot buy any further meaningful stake in PPX yet Coastal can keep buying PXUPA and lowering its average price, currently $13.41.

This could get very interesting very soon.


http://www.paperlinx-sux.com/2012/09/ppx-vs-pxupa-where-rubber-hits-road.html

http://www.paperlinx-sux.com/2012/09/egm2-harry-boon-youre-fired.html