Ann: Appendix 3Y G Rezos-AJX.AX, page-43

I will try and explain my thinking a bit - mainly for the CR thread.

this is what you want ------


So - there are two  main sides to the story of selling a business on the public boards - SP and the business itself.

You know the business is going to cut the mustard - at a particular time.

You know roughly what price you want (perhaps you don't - but, no matter there - if it is bigger - fine)

Now - the SP -

generally - you get about a 30% premium for a takeover -

so - for a 13 dollar sale - you need an sp of around 10 bucks at the time of the bid

to get a high SP - you need institutional investors.

Remember this bit - and, never forget it.

Now - to get institutions ------- they need to see that they can make one kickbutt profit -----

which means - they need to buy far cheaper than they can sell.

Now - at this point - go back and remember ----------- you NEED them to drive your SP madly ----------- you need this so that when a bid comes - the SP and the premium will get to your target.

So - to get the requisite number of Instos on board - you need to have a way of getting them stock.

You can get them stock by 2 methods - they can buy on market - or you can make placements.

The perfect time to have them on board is earlier in the piece - so, for them to get on board isn't a large investment for them - also - the sooner they are on board - in numbers - the sooner they will begin to compete.

they are the same as us - remember - it's position that counts - and, it's far easier to get 10 million shares at 50 cents than it is to get 10 million shares at 4 bucks.

Once you have enough of them on board and they have whatever amount of stock you feel is right ----------------- 'without' having to bow and scrape to them and certainly not allowing them to have control -

you allow them to drive the story north -matching or exceeding the story of the business.

It's like preparing for race day -- race day is sale day ---------- you don't want to peak too early - but, you need to be match ready - the timing HAS to be right.

Also - the business has to match roughly the MC - if the business value overpowers the MC - then, you will get early bids --------------- NOT a good thing - why?

Because an early bid WILL gain stock ---------- not all - because you have enough to block a takeover ----------------- IF you want to - but, an early bid is made from a bridegroom having a slash at a cheap buy -

what you don't want is a pissed off large holder - one who has been rejected.

The ideal - is to get your instos to drive the price to a figure that most of us find hard to believe - at the same time that several bridegrooms (desirable one's) - get so hot about the whole idea because of the business value at the same time -

so much so that they form an auction - ie. several competing bids - as you lay back on the couch to receive them one by one.

So - at this stage of the play ------------ it is irrelevant about CR's - totally irrelevant -

they are NOT bad news - they are a necessary part of the play - and, should be welcomed.

As to someone commenting on that the company will tap US for money ----

NO way Jose ---------- they don't want OUR money - they want Insto money - in fact - they don't probably even need the money - that is the point - what they want is stock in multiple insto hands.

Bit of a rave - but, I hope it helps.

Pinto