Australia's main coal testing service provider CCI Holdings (CHL) yesterday rejected the second takeover bid by Campbells (CPB). After labelling their first 31c offer as "absurdly low" and "grossly inadequate", the board has once again rejected this second unconditional offering at 35c, by commenting: "nothing has changed materially in relation to the inadequacy of the offer."
The board also points out their combined shareholding of around 32% has no intention of accepting the offer and they advise shareholders to take no action regarding their shareholding.
Highlighting the low implied P/E multiple of the offer, the fail to recognize the 74% growth in EBIT on the back of 13% revenue growth, and the 1c ff dividend which shareholders would miss out on if accepting the offer, the board has once again given shareholders valid reasons for HOLDING THEIR STOCK FOR THE EXPECTED CONTINUING SHAREPRICE GROWTH.
CCI Shareholders have shown patience over the past 2 years. This patience is now being rewarded. This reward should not be handed on a plate to CPB.
Regards,
Cheerful.
CHL Price at posting:
0.0¢ Sentiment: None Disclosure: Held
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