who will sell or hold for better offer, page-37

Regardless of the offer, the directors will be obliged to seek professional/independent advice and include a recommendation statement to shareholders. Perhaps that's part of the reason for the lengthy delay.

Bear in mind that the comparative value to shareholders from the bidder will be measured against the CRM deal. My guess is that if the bid is set at $1.40, it won't stack up.

My gut feeling is that the bid will be close to $1.40 which would be an absolute insult. Let's take a closer look at that $1.40 the media keeps harping on about. It would represent a 53.8% premium to the last closing price of 91¢ and a 46.3% premium to the 30 day average closing price of 95.7¢ . Those results may appear very attractive to an outsider but not so to us shareholders.

Ok, so what is the problem?

As we all know, UMC's sp is currently well undervalued when we consider the potential resource value. If we rate UMC's value based on both its resource and include the net worth of management, 91¢ looks about right and imo a takeover of $1.40 is the best we could expect. Problem with that theory is that the prize for the bidder does not include management.

But it doesn't end there!!!

Let's go back to the date UMC was placed in a trading halt and see how some of the other stocks have fared.

• AGO up 12% MC $709,406,300
• BRM up 34% MC $291,121,600
• FMS up 32% MC $264,774,600
• GIR up 23% MC $201,349,200
• IOH up 52% MC $105,889,500
• MGX up 13% MC $1,301,027,000

• Metals & Mining (XMM) up 7.2%

If UMC had traded for the past week, what do you think the sp would be at today's close?

The average gain for the above is 28%, so I would expect UMC to be trading at around $1.17. This means that our 53.8% premium has eroded down to 20%.

Dow futures is currently up 106 points and the FTSE 100 is up 1.97%, so expect further good gains from the above list and further erosion to our takeover value.