buy side big, page-27

Redmoki, there is plenty of liquidity with Beppa, for a start there will not be 50 million beppa traded in a day as there is significantly less on the register than BBI. The fact that beppa ran to 20c when BBI ran to 18c suggests that the upside at these levels is not limited by the daily relative volumes.

The reality at these levels is that Beppa are owed 4c in dividends plus compound interest and other interest to come and thus one can calculate that value at say 20% increase over BBI discounting for the potential cost of failure. Beppa also has a priority on distributions in the case of a partial failure of BBI.

There does become a point where the potential upside for BBI shareholders exceeds the value of the compounded dividends and history would suggest that the relevant price is around 60c, so until BBI reaches 60c which would suggest no risk of failure, Beppa should have AT LEAST a 20% premium over BBI.

With the addition of 250 million BBI shares to the register on Monday, one would suggest that the differential should be more like 30% at these levels.


Just my opinion