aet&d notes - ex-beppa holders, page-6

Take a look at both the BIP and the BAM chart for as far back as you can and you will start to get an idea of how the BBI recap affected their sentiment, and what the values were during the 2007 euphoria/madness.

Then draw an average realistic price for each as they consolidated after their peaks and see where they are now in relation to that and you will see how much euphoria exists in taking on PIH's pies as subsidisation of BIP's present returns.

Forget about PIH existing on the ASX after November at a realistic value, its been here a year and the locals don't want it unless it is at ~3.50. The reason it is not wanted locally is because it is known that BAM will not share it at its proper value once BAM have swallowed it and it is their intention to do so and has been from day one. The North Americans are sick of the low SP and want to trade it back home at equiv 5.00 plus or let BAM have them back, effectively a 'no interest and a discount as well' loan for BAM for a year to takeover BBI.

Forget also about the 20% on top of the 5.08 until such time as greater than 2007 productivity/activity exists again.

This is all about BAM achieving total control and issuing its own BIP shares out of a Bermuda listed company for its own gratification and return policies so that it can maximise the long term benefit of that growth in activity.

As it is at the moment with PIH, we all receive the same return as BAM per security and under Australian rules, once they turn into BIPs, the return policy will be under different rules, namely BAM's. The Bermuda company rules are different enough for the QIC to raise objection to being in partnership with a Bermuda rule company in the co-ownership of it's NZ power assets.

Shareholders have fewer rights in Bermuda based companies which is one reason why companies base themselves in Bermuda. The only upside is if BAM achieves a high ownership in BIP that it will reward itself handsomely and that will flow to other holders. That does not stop it from selling its BIPs or diluting the BIPs to fund more exploits and the fewer rules help this.

Voting No will only achieve triggering the takeover option, which won't make a lot of difference because most of the friendly holders will be happy to hold BIPs anyway and BIP will probably not get to compulsory acquisition point.

This is the extra chapter that Timber refers to, where the stay or go equation sits with me is whether there is sufficient return on capital after yet another CG tax event to have the investment sitting in US dollars with a $22/month holding admin fee from Pershing LLC plus the assoc 10% Non Resident fees on returns and probable relaxation of the BIP price from present euphoria before going forward again..

Plus the questions from being a minority shareholder within a Bermuda based company.

If I stay, my strategy will be to own both BAM's and BIPs, or to transfer to BAMs, because if they wanted shareholders to have equal rights to BAM they would be offering BAMs.

I would appreciate other viewpoints and strategies if you can see where the above needs improvement.

Thanks

ifandwhen