a move thru 75c should see the stock go to 95c-1.00Stock: OTT...

a move thru 75c should see the stock go to 95c-1.00

Stock: OTT ($0.007)

Current Valuation/Price Target: $1.80
Recommendations: Speculative Buy

Event: Macquarie Bank buys 1.69m shares from founder Wayne Passlow at $1.00 per share, takes 11% interest



Details:

OTT has announced that Macquarie Bank Limited has acquired approximately 1.69m shares from Telinvest Pty Ltd, a company associated with founder Wayne Passlow, at $1.00 per share representing a 43% premium over closing price of $0.70 on the day before the transaction took place.
Macquarie Bank had previously acquired 370,000 shares in OTT's placement in October 2003 at $1.00, and this purchase takes its interest to approximately 2.04m shares representing an 11.3% interest
The shares sold represent half of Wayne Passlow's interest prior to the sale.
Impact:

While Macquarie will not comment on the purchase, Macquarie Bank's technology investment banking division has been a long-standing investor and advisor to OTT, and the bank was a secured creditor of OTT through its difficulties until it was repaid in March 2004. We understand Macquarie continued to provide advice and was supportive of the company through this period and participated in the October 2003 placement.
There have been no discussions yet as to whether Macquarie will seek to appoint a board representative but we view this as a distinct possibility.
We view this transaction as positive, owing to the premium to the market, Macquarie clearly being a highly credible cornerstone shareholder for OTT and Wayne Passlow remaining a significant shareholder with a 9.4% interest.
However, in our view the key to sustained performance for OTT will be delivering on management's forecasts of $17.9m revenue and $5.8m EBITDA which we see as likely.
We retain our Speculative Buy recommendation and valuation of $1.80