Acceptance of JBL Offer

I am writing this post to outline a few reasons why I have accepted the offer, and can hopefully start a discussion of the pros and cons. I'm not trying to force anyone to change their opinions and votes, but it may be helpful to have a thread with some of the facts and some important questions we should all consider.

Here are some of the pros:

• Firstly Stuart and co are some of the largest holders in JBL, aligning his incentives with mine is a big thing for me. We have seen a large parcel of HML shares being converted already. I believe this to be Stuarts holdings (or the directors etc.).
• The only way I can see us releasing ourselves from the (large) management fees paid to JBL is to sell out HML/BHD shares (probably wont happen). Or own HML through JBL and thus pay the fees to ourselves.
• What happens to an investment company that cannot trade and is closed ended? How can investors get any sort of money back if the funds never trade again?
• If you vote it down are you implicitly voting for the company to be wound up? How can they wind up the assets if it holds unlisted assets and illiquid JBL shares. (But then why would you want direct ownership of JBL if they are illiquid)

And the cons:

• JBL are burning cash like nobody's business, will they even be solvent next year?
• Is the consideration we are receiving fair? Will we be diluted by all the options which are on issue. Also JBL expects to conduct a capital raising soon why was this announced after the offer was made?
• Also, we must ask ourselves is accepting the offer doing us a favour, or is it propping up JBL?
• What happens to the class action if you accept the offer. Can you still be counted as a plaintiff?
• JBL cannot be accurately valued since it made a large loss last year. The directors are right that it should not be valued on assets alone, but what other way is there to do it?
• HML and BHD probably will not trade again, it seems as if the ASX wont allow it.
• JBL may never move to the ASX as the ASX has discretion over acceptances. Will we ever achieve liquidity, even in 5 or 10 years?
• The only buy order currently is 515 JBL shares for $1 each. There will be a mad rush of sellers on the NSX once the JBL shares are issued. They may never sell at any price.If we are able to sell it will probably be during a very limited buyback.
• Shareholder communication is crap and probably remain crap. The NSX is not as good at asking the hard questions as the ASX

For me I chose to accept the offer to stop paying management fees on investments that are just not working out. The other big consideration I made was to align myself with Stuart and his family and friends.