peoples views on the restructure, page-2

Hi Seanmorr,

Been away in Europe for an extended holiday! There wasnt much happening in CER land until now so I suppose not much to report.

Quite frankly the best way for CER to realise its full share of 41c NTA would be to offload its portfolio rather than go down this process, which benefits no one other than all these institutions, advisers and solicitors. it has become an absolute circus.

They have said in the announcement that there poses a risk that CNP goes into administration and therefore CER's largest shareholder is controlled by a receiver/administrator.

Really, who cares what the financial health of our largest shareholder is. If CNP went into administration, CER would still have the same tenants, same properties, same gearing, same everything.

As I said above, given where the share price is relative to the 31 Dec 10 NTA, the best way to MAXIMISE value to shareholders would be to offload the assets.

They are valued at a very high cap rate of 7.5%, which is over 150 basis higher than pre GFC. Given WRT, CFX and other REITs have assets valued at a cap rate of 6%, I have no doubt that a cap rate of 7.5% could be achieved on a sale of CER assets, which would make the acquisitions EPS positive for these other REITS mentioned. Also, we would have had income growth of 2% during the half year (4% / 2), which would push NTA to around 42c.

Why does bigger have to damn better according to the board?

We are listed so we have no liquidity issues. The unlisted syndicates who are looking to buy into the new entity should be paying a massive premium to have the privledge of having a liquid asset. As far as I can see, this is not the case at all.


Although I didnt agree entirely with the US sale (especially Super LLC), I was happy to accept a 40% gearing and the promise of distributions as soon as the sale settled. No policy has been put forward yet....

We have made it this far on our own and Im happy for CER to continue down that path going forward unless we get a substantial sweetener. My first preference is for CER to ofload the portfolio at or close to NTA.

Also, has anyone noticed that the new entity is paying $200m to CNP for the funds management business. Was that ever meant to happen? CNP's secured debt holders are pocketing a extra $200M which CER is subsiding 29% of (we are getting 29% of the new equity)

Im going to look into the announcement a bit more closely but at this stage I am very unconvinced and really this ann just upholds the great tradition of CER coming off second best.

Cheers

PS Im still holding as many as I always have.