odg/haden integrated povided, page-7

Hi Madas Maui's average cost per share (Buy in) was 67.5 cents just over 3 years ago via their Indigo Fund.
The Indigo Fund became fully invested early this year (ie they have spent/invested all the money in that Fund) Indigo contains NFK & 5 other private companies in this fund.
A company passes into maturity at the 3 year mark, which NFK has just moved through this time period and is considered mature and needs to be realised (sold) to return money back to its investors (at a profit) The target return of the fund is 3 times original cost price - 67.5 cents in this case.

Maui recently confirmed that they did have an offer on the table earlier this year for $1.80 but due to the ASX volatility the purchaser pulled away. This happen again at a lower price and once again through the ASX volatility the purchaser pulled away ((2nd offer price unknown to me).
Also recently post August 22nd another offer was made, but rejected outright by Maui.
Maui have stated (I think 3 weeks ago now) that they have renewed interest.
To quote Maui;
"We note the fund has fielded significant buyer interest for it's Norfolk stake this year, however each time the interested has been stalled by the ASX volatility and / or market uncertainty"

I would like to reinforce here that prior to the Indigo's funds 3year maturity mark , Maui will have been very confident in their position to obtain a maximum return (ie 3 times) as they have an excellent track record to back this up. But now post the 3 year mark and considering the volatility on the ASX and the short selling etc. the Maui team will now be very motivated to consider a lower deal and as such realising a lower profit multiple, but ensuring a solid/reputable return to their Indigo membership. Also a lot of the Indigo investors have also recently invested into another Maui Fund called Aqua, (who also has the same cornerstone investor - a Macquarie entity) The Norfolk valuation has been well scrutinised, and this was further reinforced by Masfen & Perpetual taking large positions.

So considering of all that has been referred to here Maui have reduced their in house valuation, based on an actual achievable value and based on current numbers (as at 30 Sept) of $1.23 per share. This will now be their expectation, and I stress here this is not a "Price Target" but a real value to a buyer today. This SP expectation can easily be backed up via metrics such as P/BV, EV/EBIT which are most commonly used by a purchaser to assess and form their offer. In fact using this would put a lot higher figure than the $1.23 expected by Maui - and that is after the FY13 First Half update. The obvious challenge against this statement is the current SP being over sold and creating a confidence gap.

Motivation to do a deal is high and their is currently (as of 3 weeks ago) renewed interest in Maui's holding. Maui are very confident in achieving their price - and in my opinion, sooner than later.


Typically a long reply madas but I try to keep it factual.