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pinoy71

645 Posts.

02/03/16

09:19

Post #: 17162163
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Originally posted by serena ↑

The acquiree in Singapore will not be able to apply for Initial Public Offering if the company has no track records of accumulated profit for a specified period of time. Subject to the Australian Securities Exchange (ASX)'s approval, a firm is allowed to go public via ASX although the firm has no track records of profit (See the ASX Listing Rules 1 and 9). In other words, a newly established firm without track records of profit could also go public via ASX.

Question: Why don't the owners of this acquiree establish a new firm in Australia and apply for Initial Public Offering via ASX?

If the owners of acquiree wants to do back door listing via an Australian publicly listed firm (acquirer), they are more likely to control the acquirer.

If you are the owners of the acquiree, you may want to control 70 or 80 per cent of the acquirer.

If the outstanding shares of the acquirer are 560 million. To enable you controlling for 70 or 80 per cent of the acquirer's equity ownership, 1.3 billion or 2.2 billion new shares may be issued respectively to the owners of the acquiree.

Unfortunately, we do not know many factors for example the number of shares to be issued to the owners of the acquiree, the agreed share price, purchase consideration, and projected profit of the acquiree. Due to this uncertainty, stock price is going up and down like roller coaster. In addition, new retail investors who purchased on market at a higher price, they have a different playing field compared to the holders of 245 million shares who obtained the shares at a very cheap price (0.001).

The above illustration shows that the contents of the deal are more important than the announcement of the deal.

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Two ways to settle this acquisition and they are by cash or share. If by cash how much do you think will Gridcomm worth?

ODN Price at posting: 1.5¢ Sentiment: Buy Disclosure: Not Held
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0 Great analysis

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ODN Chart, page-21

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