Ann: Intention to Make Takeover Bid, page-154

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madamswer

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03/01/19

10:44

Post #: 37011363
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Originally posted by kittyboomboom ↑

Originally posted by J.S.Mill
Good points. Especially, 'worry about what you can control'. Which is why I ask what can the Board do about fighting off the takeover?
They do have options. They currently have control over TRS assets ... why not use that control? Special Dividend? Franking credits ? Buyback? Directors announcing that they are buying ,say, 5000 shares ? As astral says announce new store in a large hub.

I think a buyback would be much more appropriate as that can also use franking credits and actually buys back a chunk of equity that can be resold later if needed, launch a buyback at say $2.80 for 10% of the company (around $8m), it would likely not get many takers but sets a new floor for the price and snookers the current offer which has just been extended.
If management had ANY confidence in the result they are about to present this would be the only way to increase value for holders, if they could buyback even 1-2m shares and then release numbers showing some stability it would create extra value for holders, nb; I said increase "value" not "price".
I suspect if the numbers were going to match managements expectations this would already have been done, I just hope they don't match the expectations of the bidder and drive the market straight into their offer.
Paying out excessive dividends does not actually create value, investing it wisely or buying back shares at a sensible price does, if they create value dividends will follow in due course

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@kittyboomboom,

You're absolutely right; that would be a far more sensible takeover defence strategy, as well as being a value-accretive move, based on the fundamental under-valuation of the business.

Trouble is, the manager and directors of this company have a demonstrated inability to deploy shareholder capital in a way that is value-enhancing.

Their focus appears overwhelmingly to me to be to secure their over-paid jobs.

TRS Price at posting: $2.75 Sentiment: Buy Disclosure: Held
4 Upvote

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Ann: Intention to Make Takeover Bid, page-154

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