FPR (ASX) SGF offer is far more superior than MMS merger offer for ECX shares?

Originally posted by IsdHope: ↑

Hi everyone,
Just to let you all know I represented a number of investors who bought ECX shares recently. I wrote a complaint letter to ECX as previously mentioned in this forum. An ECX representative, Alan Dury (AD) and ECX managing director, Doc Klotz (MD) contacted me yesterday morning to discuss the matters I raised in the complaint letter to the company. The essence of the compliant being there is no further update from MMS since 29/01/2019 and the directors of ECX has not followed this delay diligently. Furthermore the directors of ECX have not acted in the best interests of sharehodlers by not engaging with SGF to see whether it can revive theprevious takeover offer from SGF or improve on the takeover price.

First of all, AD and MD assured me that what we are about to discuss is already in the public domain and they are legally not allowed to provid any information to me that is not previously announced to the ASX. I replied of course that is my expectation and I am not here to ask them to provide any confidential information which is not already disclosed to the market. Here are the main points of our discussion.

1) MMS has provided a further update since 29/01/2019 in their half yearly results presentation on 20/02/2018 that further work is required and the first court hearing on 1/2/2019 will be rescheduled to a later date and a further update will be provided in due course.
2) The previous offer from SG Fleet was a non-binding indicative offer only and was rejected by the directors as the directors perceived that shareholders would receive mostly cash and not be able to participate in any future benefits of the merged SGF company;
3) This is unlike the current MMS merger implementation wherby shareholders of ECX are able to gain more shares in the merged company and as such will receive better benefits from the MMS merger offer;
4) The merger agreement with MMS has a clause 10.2 - No shop, which says that ECX cannot solicit, invite any competing transaction or any enquiries or proposals from SGF or any other entities. In other words, ECX cannot approach or undertake any form of discussions with SGF.
5) Shares in all leasing companies have fallen since the merger announcement. However, SGF shares has fallen the least.
6) ECX and MMS are still continuing their discussion on the merger proposal and any further updates will be provided in due course.

On the basis fo the above discussions, it is now abundantly clear to me that the SGF offer whilst more superior that the MMS offer is now best considered to be dead and buried. Whilst MMS and ECX are continuindg their discussions, no definite deadline regarding court hearing has been proposed. There is still a great risk that the merger offer may not go ahead. Furthermore,based on the outcome shown in another merger case in which SIG rejected the API offer which was announced this morning, the share price of SIG has fallen 12 per cent today.

Based on the above assessments, I feel strongly there is still too much uncertainties regarding the merger proposal and as such to avoid the rapid share price decline as experienced by SIG today, I have sold most of my ECX shares today and also yesterday. My clients have also followed me in sellingmost of their shares today. The shares were sold at a great loss of course. This is not to say that I considered ECX to be in any way over-valued but there are too much risks and uncertainties with the delay and based on my discussion yesterday and reading the ECX and MMS reports so far, it has raised a lot of doubts in my mind whether MMS is now as keen as before with the merger proposal.

Good luck to you all with your continuing investments in ECX!

Cheerio,
Isdhope

PS: SInce AD and MD have answered most of my questions, I have given AD and MD an undertaking that I will not be writing a complaint letter to the ASX and to the major institutions and large shareholders.

Expand

Considering what has transpired on 20th March - then it appears that the directors & management were well aware of the current situation when they spoke with IsdHope on this date (being 13th March). I'm starting to wonder if more was said at the meeting than has been reported since IsdHope and his cohorts sold out of ECX immediately. There is every indication that IsdHope forced their hand here and had to come forth with their mea culpa. I wish I was smart enough to have been closer to the mark with my comment on 14th March. Jeez I pick some dogs sometimes.

No.	Vol.	Price($)
31	11675	$3.56

No.

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Price($)

11675

$3.56

Price($)	Vol.	No.
$3.57	6324	20

Price($)

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$3.57

6324

No.	Vol.	Price($)
31	11675	3.560
26	21764	3.550
18	8095	3.540
12	12257	3.530
9	4115	3.520

No.

Vol.

Price($)

11675

3.560

21764

3.550

8095

3.540

12257

3.530

4115

3.520

Price($)	Vol.	No.
3.570	6324	20
3.580	8902	18
3.590	19074	14
3.600	69265	9
3.610	35257	8

Price($)

Vol.

No.

3.570

6324

3.580

8902

3.590

19074

3.600

69265

3.610

35257

(20min delay)
Last $3.57		Change 0.030(0.85%)		Mkt cap ! $849.5M

Open	High	Low	Value	Volume
$3.53	$3.58	$3.49	$1.245M	350.8K

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