We can probably expect an announcement shortly in regard to the formalisation of the JV and Notice of Meeting.
There are still unknowns about the demerger process, I'm talking mainly about the order we'll see the Entitlement offer and the in-specie distribution. Looking at about 8 recent demergers, they all seem to do it in a different way, though most do the Entitlement offer 1st.
I intend holding both FFX & LLL (though not necessarily equal weight), so the order doesn't really matter to me, however it is important for those only wanting to hold LLL. When FFX goes ex-entitlement (2 days prior to the Record Date) those holders will have the opportunity to sell FFX and still get their LLL shares.
FFX have said nothing officially about issuing a Short Form Prospectus. Mike did Mention it in an interview early December. (so could now be out of date). A SF Prospectus would normally only be issued if the demerger & in-specie distribution is going to precede the IPO. The IPO requires the full Prospectus which would have to be issued prior to Entitlement Offer. The wording of asx announcements (eg Activities report) and Mike's mention of the SF Prospectus tends to make me think they'll do the in-specie 1st.
The SF Prospectus would normally show the distribution ratio, but wouldn't assign a monetary value to it. Eg it might say you'll get 1 LLL share for each 5.5 FFX shares you hold, but won't give a monetary value. Most of the information would be in the Notice of Meeting, usually issued on the same date. On the other hand the full Prospectus will need to show the number of shares to be listed along with the issue price, which will be the price offered in the Entitlement Offer.
In all of the demergers I've looked at, the parent company is quite a bit bigger than the spin-out. In our case, IMO LLL will be bigger than FFX, so this is quite a bit different to most spin-outs. I think they'll want to put the full prospectus out as close to the listing date as possible in order to price it appropriately hence IMO the demerger/in-specie distribution is likely to occur 1st.
Having said the above, in LTR's case, they issued the full Prospectus with the notice of meeting (not unusual). The entitlement offer was done in the 4 weeks prior to the meeting, closing on the day of the meeting to approve the demerger, with the in-specie Record date 6 days after that. This was the only demerger I could find where they implemented the process prior to getting shareholder approval. Given the timetable FFX are pursuing, we could do something similar to LTR.
Hopefully we'll find out next week.
FFX Price at posting:
68.5¢ Sentiment: Buy Disclosure: Held
