cheap takeover offer, page-26

Day-by-day dilution at B&B Infrastructure
Fairfax
September 8, 2009

....A Merrill Lynch analyst, Matthew Spence, calculated the full conversion of BBI's BEPPA and SPARCS hybrids - a likely condition of any recapitalisation plan - would leave current shareholders with just 18 per cent of the company.

And that is before the cornerstone investor injects additional equity in return for what is likely to be a majority stake in the company. After that, existing holders would own less than 9 per cent of the company, which would then have more than 29 billion shares on issue.

But those calculations were based on Friday's closing share price of 6.1c, compared with BBI's closing price of 4.5c yesterday. That means the potential dilution is getting worse by the day - a condition that some punters have labelled a ''death spiral''.....