Ann: Quarterly Activities and Cashflow Report, page-7

@caver

Sorry but your view doen't stack up unless you weight your post for xenophobia.

the fact is Shandong has lost money, a substantial amount, since they bought about 50%.

Chinese love money and the only way to get that money back is to pay dividends (to everyone) OR do a TO and keep all the profit.

A TO could be done in a nasty way, for example allowing a huge cash pile build-up and offer a big TO price. Suppose pre TO $100m cash and MC of $200m. They own 50% or $100m in shares. The TO is $300m. 1.5x the SP.

They would end up with $150m in shares, (company value) plus the $100m of cash in the company vault. They offered $300m and paid out of pocket $50m. A simple NPV of future earnings would tell you $50m is a good price for them - its the check of fair value. Realistically, the Independent Report will say "not fair, but reasonable". Thats all she wrote. (the $50m cash from their pocket would be borrowed from Head Office as a loan. $50m plus interest would be repaid from the $100m cash in the vault). Tricky heh! This is why companies worry about having too much cash (or current assets), because it can be used against them.

We are a long way from that scenario yet. (its just an example, numbers are illustrative only), but at least current SH get any sp rise in the interim and an extra 50% at some point. (and it could only be 25%).
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