Once there was a little company that lost it's way and new management came in , streamlined the business created a little cash cow. They had $26M cash in the bank but were lost for new ideas how to take the company forward. They arranged for thier friends to buy a major 49% shareholder out at 55 cents. This was possible because they could show the share price was always sold down when it was near this level - it wasn't going anywhere. They then wrote to the shareholders offering them 55 cents as they we taking it private and thought it was the right thing to do. They ended up with a private company for $18M with an EBIT of $7.5M. They were happy and so were thier friends.
The best, best thing management can do with the $26M cash is buy the Telstra holding and cancel the shares. EPS would effectively double and everyone would be happy, especially the current shareholders
KYC Price at posting:
53.0¢ Sentiment: None Disclosure: Held
