I read you post about the exact same situation about couple of days ago on dual listing, thought about it and I decided that this can go in two ways:
1. It revert back to core intrinsic value of the business which is at > $1.00 or so. I didn't do intrinsic value for core business yet so I don't know for sure, it might be $2.00 for god knows it. But with seperation comes one risk. SGH is a mature business in Australia and organic growth is now left with a 3%/annum in line with GDP growth of Australia, that is not good to create value for long run. Which is why they took a big risk to go with UK in the first place, it is the biggest bet that I have ever seen in a mature company.
2. Listing UK subsidiaries in UK would destroy its value completely as a large chunk of business value rest within SGS, and it is yet to make a positive cash flow, by listing it, the company will be delisted within months, plus I don't think that its value is justified enough to be listed in LSE yet.
With those two aspects,
I decided that the recommendation for dual listing will be a value destruction to business and shareholders,
Robert
SGH Price at posting:
60.0¢ Sentiment: None Disclosure: Held
