3 scenarios of the outcome of mme buying

This is Mr Lincoln Augustus, first second cousin of Holymagiman

It has been announced that MM&E Capital Pty now owns 7.45% of Sapex as of yesterday.

It was announced that Linc owned 12/34% of Sapex on 19th June. We do not know what their share-holding is as of today. I would presume that the percentage is higher.

As I see it , there are 3 scenarios possible.

1. MME is buying for itself as a no risk arbitrage play, paying 70 cents now and picking up 72 cents in a couple of months. This works out to be a no-risk return of 18% on an annualised basis for MME.

2. MME buying on behalf of Linc and will sell to Linc in the end, making the same profit as above

3. MME buying on behalf of someone else. Hopefully this is the case, but not very likely.


The rest of us will, of course, have no clue what is happening to the options, as any increase in option-holding does not have to be reported to the marketplace. I do not think the current Sapex management will deem it necessary to let us know what is happening.

Yours etc., etc.,
MLA