To Settle or Not to Settle?, page-12

The right field event is "No Settlement" and the parties proceed to trial in late May. That's known and priced in IMO. Not much else changes between now and then.

The left field event is "Settlement" and the parties end all current actions against each other. This wouldn't preclude Capri, ASIC or anyone else taking action against either parties if the Corporations Act has been breached.

So I ask, at what point does any Settlement become material to KDR shareholders?

1. $250K, limit of MZN's April offer. I'd say Immaterial
2. Up to 15% of MC, It'll be considered Material but no different to a share dilution that doesn't inject any value. This opens up the question of whether Board approval would be needed for such a settlement or dilution?
3. >15% of MC, Definitely Material. You'd think this would require Board and Shareholder approval.


In the context of the 4.3 times value gap between KDR and PLS, points 1&2 are probably immaterial. Point 2's would unpalatable if you don't want to be sitting next to an MZN director in the future.