re.takeoover, page-2

Interesting question Looka.

Especially when you refer to a pre JORC takeover. Hence we can use current share price and U market sentiment. Assume a raid on DYL today at current market price of DYL ($0.30) the cost to PDN of acquiring 85% (PDN already have 15% of DYL) of 1,077 million shares at $0.30 cents is $275 million. PDN as of its March quarterly had $417 million in cash. $374 million of that in SHORT TERM US treasury bonds. $325 million of that raised via recent convertible notes issue for the purpose of expansion and ACQUISITIONS. Expansion in the form of extension of production facilities and ACQUISTIONs of Do Your Lown research (maybe).

Given these numbers some conspiracy theorists may say that DYL's share price is being held down to the nice $0.30 figure deliberatly by an information vaccuum among other things. Although must admit the recent announcements have been frequent and quality info. (Good to see DYL management! - maybe they've been listening).

Given a takeover premium - at these levels - either driven by hedge funds et al on market - or offered off market in takeover scenario of say $0.10 you end up with another $91.5 million. i.e. total takover now off $366.5 mill.

At the referred price level example of $0.40 i think it would lean to a fully cash offer with PDN going to its existing shareholders with a rights issue or a placement for say $75 - $100 million. Keep in mind they will need cash for expansion (other projects and production plant expansion).

If they leave it too late and DYL price improves (i.e. closer to JORC) and info flowing out of DYL as it has last couple of weeks then they obviously have more to fund and we'll end up with a combination of scrip and cash, IMO.

When considering this scenario also keep in mind that if PDN were to take over DYL, say tommorrow, they also get $64 million (DYL's) to fund their acquisition. Why was this funding sought if it was not going to be used. The share purchase plan at $0.50, once the price of the underlying DYL stock was pressured down below that, allowed PDN to increase its stake by underwriting all unsubscribed stock (it was a large percentage)at a fixed price for a smaller premium than if it was to undertake such an excercise on market. And where is the money. Still in the bank some near six months later.

Cheers