@aribeth
That is a good question. It really depends upon the bidder whether the offer is all cash, cash and scrip or all scrip. An all scrip offer is not necessarily bad. Newcrest made an all scrip merger proposal to the shareholders of Lihir and while others may disagree with me I consider it a fair offer for Australian residents as the capital gains consequences of the disposal of shares is negated in an all scrip takeover which sweetens the value of the deal for the shareholders. However, if the shares are not listed on the ASX or if the company has a high debt to equity ratio then the shares are not worth as much as cash would be worth to Australian resident shareholders. On the other hand, if an offer is all scrip it can be more generous because the company does not have to borrow the money to buy the shares and the company's debt to equity ratio does not get increased.
So, if there is a take over offer we will have to see who offers what in order to decide who's offer is the most generous.
DEG - Expect news on Thursday, page-33
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| Open | High | Low | Value | Volume |
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|---|---|---|
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