market cap and nav, page-73

Melua, IMO, at these levels BBI sp says that there is a high chance of failure. Thus, BBI holders are essentially buying an option contract on a very successful DBCT outcome. And unfortunately, it appears that the company is not creating other options to reduce corporate debt and generate excess cash to support assets.

If you agree that the market is pricing the head stock (and the liquid stock) as an option (and an out-of-the money option), then BEPPA (in theory) should only trade at a small margin to BBI, and possibly less than accrued interest. This is particularly the case as banks wont care about BEPPA in administration.

I suspect that what we are seeing in the BBI/BEPPA price is a small proportion of investors switching from BBI to BEPPA over time, thus propping the price. I presume instos that wanted out have done so, which is why we saw BEPPA prices at around 5 cents.

In summary, just as BEPPA was relatively undervalued at parity, it is overvalued IMO currently.