MGC 0.00% 43.0¢ mg unit trust

Takeover deal, page-67

  1. 12,185 Posts.
    lightbulb Created with Sketch. 437
    Allow me to indulge here...the listed unit price is driven by its potential yield and that depends on the company's financial performance during a financial period.

    The takeover as you refer to doesn't actually exist, what does exist is a market solicitation for some or all of the company so it can assess what options it has to reduce the negative cashflow position it is currently in and then decide to either acquiese the business once and for all or to shrink it to a point where it can make an operating profit and post a return for its shareholders and its unitholders in years to come.

    The listed units are effectively debt and they have a nasty sting in their tail for unit holders and that is the company can treat the debt at a discount to current market rates and remove the units if it so wishes.

    So buying some units doesn't get you any piece of the "takeover" action you refer to.
 
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