is pxupa a buy?, page-96

Not trying to build up hopes but my reasonning below would tend to think an offer to buy back PXUPA's (as hinted in Feb 2011 results report) is a likely reason for the TH.

This may have been an underlying reason for paying the distribution recently - otherwise the buy back before the reset in 2012 was (I understand) not possible under the rules.

If they were going to buy back PXUPAs it would make sense to do NOW while price @ $32.80 as I only see it going higher from here.

Instos appear to have dumped prior to financial year end (internal bookkeeping)and I expect would now be looking to buy back in for the yield.

PPX certainly do not want PXUPA conversion to PPX as this would kill off existing PPX holders due to the dilution.

Buy back option at < $100 prior to the 2012 reset would deliver value to PPX as otherwise the full $100 comes in to play at the 2012 reset.

If they can buy at say $80 then net asset position improved by $50 million ie 2.5 mill PXUPA x $20.

Also do not have to pay out the next 2 dividends, saving $20 mill which would cover the financing cost of the $200 mill buy back.

Other consideration

With PPX at current prices it must be seen as a takeover target.

If PPX taken over then $100/PXUPA to be paid out

Removing the PXUPAs makes sense as PPX will be a better proposition for a friendly takeover, or better able to depend a hostile takeover - whichever strategy is being played out.

Either way, better to attempt to buy back at < $100 now.


SUMMARY

I think a PXUPA buy back is on the cards. PXUPA holders would need to make their own call but I would have thought we are in a strong position and if the offer is not very attractive then I would be prepared to go to reset but still thinking this one through.

All the above represent my speculative musings