african discount, page-8

Hi Zen,

Not sure why you want the company taken over so quickly - perhaps because it immediately dissipates the risk applying to the stock and this risk is something you don’t like – yet you then went on to say you were mainly into speculative stuff. Not sure the two thought lines are quite combined lol, however a takeover at $1.5b implies a per share price (162m shares on issue) of about $9 something. I think this might be way undervaluing the company.

You say you are working on a $200m after tax profit. This translates to about $1.20 per share profit. If we assume an 80% div payout ratio this gives us about $1 a share dividend. Might we assume a yield of say 5% for this dollar a share dividend – translates to a $20 share price.

Thus for me at this stage I would quite prefer the company remained in our, the shareholders, hands - based on your numbers.

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