Ann: Trading halt, page-16

Given the high cash on hand and likely (some) franking credits (note, I haven’t checked this in the annual report but it’s been profitable some I’m making an assumption), they will likely pay a large dividend to reduce the capital component. So while the end bid price might be lower, if you add the dividend part it could be around that 30% as you say. That’s a more likely structure than a simple cash bid.

More importantly, RHP is formally in play so private equity will look at this given they can leverage up the earnings and even with a premium, on a forward view it’s relatively cheap for a capital light tech business.

What we’d all like to see is a bidding war. Remember broker consensus is at $2.45 without a premium and as tomorrow is July 1 the analysts ‘roll forward’ their models to the new financial year, which for a growing company often means target price upgrades. There’s easily potential for this to get to +$3.50 if things heat up.

Anyway, that’s a long way to say this might just be the beginning. GLTAH