Ann: Recapitalisation Agreement, page-225

What worries me most about the recapitalisation proposal is the potential for compulsory acquisition of the remaining 5% against shareholders wishes.

I write from the point of view of someone who wants to invest or hold at current prices to participate in a recovery of the business.

I believe that the shares are currently probably fairly priced by the market subject to a significant risk premium.

I also believe that the business operated efficiently can recover and generate 2-3 time growth with sustainable dividends over a 5 year period. I expect this is the scenario the new owners anticipate and desire. It is the outcome in which I want to participate.

And here's the rub. With a 95% holding the new owners cap proceed to compulsory acquire the remaining shares and deny current holders the ability to see a substantial return.

I admit my understanding is only at the google level, and would appreciate comments from anyone more knowledgeable.

http://asic.gov.au/regulatory-resou...es/rg-10-compulsory-acquisitions-and-buyouts/

Why do the hedge funds need 95%, surely 80% would ensure their control, repayment of their debt costs, and healthy return on equity.

I assume they want greater than the 90% acquisition threshold so they can have all the profits and not share nicely with existing loyal and supportive owners.

I would like to think that the final agreement can be reduced below the 90% threshold, or that the new owners provide some kind of binding assurance that they will not proceed to compulsorily acquire.

Of course, that is what I hope, and the basis on which I would make any further investment at current prices, but I have no idea how to facilitate that outcome.

I do think current owners do wield some power as the best interest of the hedge funds is served by continued operation of the business, and to do that they need shareholder approval.

While denying agreement may be ensuring our shares are worthless, I think I prefer that to having my investment ripped off by greedy hedge funds who want it all after already being very well rewarded for limited risk.