takeover, page-2

Yes, Elvis, above 35cps but well below NTA valuation of 80c.(I never quite understood why you thought 35c was the magic takeover price, simply because it happened to be the strike price of the option agreement between Torjan and Octavium.)

As for some of the peculiarities (especially the expiry date in the context of this takeover offer) of that option agreement is sure to attract scrutiny from the ASX and/or ASIC.

Also, shareholders should be aware that it is a condition of the Scheme of Arrangement that a 20c/share dividend be declared (pending Tax Office approval), effectively to allow for the excess franking credits (>$13m worth) to be returned to shareholders.

So, should the Scheme proceed, someone who bought the share at 25c, would be incurring zero capital gains tax liability. The premium received over 25c would take the form of a fully franked Special Dividend.

So while this offer is below my assessment of the intrinsic value of the business, I am reasonably satisfied with the tax effective mechanism by which the transaction is likely to occur.