what the chairman and ceo dont say, page-8

relaxan,

I concur with your thoughts on the fairness of the capital raising. I have trouble understanding why Elders went down this path rather than the Rio path of a renounceable rights issue. At least with renounceable rights, every shareholder, regardess of whether they wish to buy more shares or not, benefits equitably from the implied discount between the rights price and the theoritcal ex-entitlement share price. Bring back British law!

Maybe given the size of the issue they had no other option but to grovel to institutions and underwriters. I look foward to the day when this type of unequitable capital raising is banned, and hopefully those Senators that have nothing else to do but sit on pointless committees can instigate an enquiry into these boys club rorts.

I can understand your sentiment in selling the ords - these are now more diluted than those cups of post-mix coke from cinemas. But it's hard finding better value than the PAs right now. These are effectively offering a yield to maturity of ~20% pa at $50 if we assume that either $100 is returned in 2011 or coupon payments recommence in 2 years at the 250 basis point step up. The risk has significantly reduced from the capital raising. I think what we've seen over the past two days with the PAs is a transfer of wealth from the impatient to the patient.
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Disclosure - hold the PAs but not the ords. My position of LT buy reflects my +ve views of the PAs but not the ords.