Ann: URF executes Purchase and Sale agreement, page-71

It's certainly an interesting question as to which regulations apply, and I'm not really in a position to argue one way or the other except to pose the question: Is this a proposal to dispose of the main undertaking, or is it a proposal to wind up the fund?

• On the one hand it could be argued that the disposal is not for the entire asset portfolio, it can't be interpreted as a proposal to close up shop. It could also be argued that once the principal undertaking is disposed of the funds could be used to acquire an alternative investment and continue.
• On the other hand it could be argued that winding up the fund is an inextricable element of the proposal, and that URF have made it so by tying the sale and the wind-up together in their announcement.

The thing that deeply confuses me is why this degree of desperation? You normally only see this kind of "this is the best we can do, take it or leave it" kind of proposal from a company facing receivership. Given that the fund has told us that they are well position to profitably continue operations, why under the sun would this company contemplate this proposal? Not only have they taken on a $600k break fee to keep the proposal on the table pending an independent review, this break fee steps up to $5 million if the report only finds the offer reasonable, even if the offer is determined to be unfair. This oozes of desperation! Why? If things are as the fund has said then the deal should be zero to keep the deal on the table because it's such a good deal for the purchaser that they should be happy to do that. And a modest break fee ($500k?) only to come into effect if the independent review finds the deal is fair and reasonable.

On the market side of things I expect that CPU holders are madly buying ordinary units on the market. If they can get enough ordinaries at or near the payout price to swing the vote they can score a 25% margin on current CPU prices and as much as double their purchase price depending on when they acquired them; all while trading break-even on the ordinary units. Add to this that there are probably a lot of ordinary unitholders who also have CPUs, and I would not write the vote off as a foregone conclusion.