It is a funny old thing ...."knowing when to fold them". Never easy, nor simple.
For me personally, I still have no facts or evidence or any context about why our Board is recommending this offer. This is disappointing to me. I've been invested since 2010. I try not to let this cloud my thinking, as much has happened in this time frame. If the Board is reading this - and I know they are - then I implore them to respect us shareholders and set out your thinking in recommending this offer. I am not saying here and now whether it is right or wrong. I am saying that I do not have context from our Board.
If I set aside (1) the directors' obvious self interest (options), (2) the farcical new CEO video debacle ....should have joined some dots then in hindsight !! ....(3) the unannounced departure of Nick Bias as head of IR (and whatever your opinion of him, he was an open channel to significant retail investors for the last 18 months or so ......of which I am one .....and of which I appreciated .....and of which my guess - reading between the lines - is that he didn't agree with the pathway we now seem to be on and then duly pissed off), then in many respects a future under OZL could be an amazing way forwards, but it just seems so much more dilutive than if our Board had dug in and gone it alone. I do not buy the fact that finance is not available. At all. We have some truly stellar project opportunities.
It has yet to be seen if our Board's "recommended" offer is in fact a bluff to call out two of our major shareholders and see where their support lies, or indeed if our Board is completely in bed with BR & Appian & OZL. I do believe that forcing out one group of our major shareholders is a good thing, but it would be sad if in doing so, we lose control of our company. Because the upside is simply too big. There is a trade off around this situation which I suppose the Board must have grappled with, but I think most here will agree that the average retail punter has been sold short by executive self interest (at worst), or complete lack of communication of Board thinking (at best).
I have posted before about the relative lack of liquidity in AVB, i.e. that too much of our equity was locked up in the hands of parties with a non-common agenda. I know for a fact that the Board was aware of this, but what I don't know is where the underlying Board alliance is in terms of our 4 major shareholders, before OZL tipped in a bid. I do not think it is as simple as it looks, right here, right now.
In all honesty, the Board's options are not that huge. Sure, they are valuable, but they are not obscene. Their mistake was not buying more direct equity, which is always considered as true skin in the game. When those options were granted, I bet 10c felt so damn easy. But it didn't work out. BR grabbed the company by the short and hairy ones in granting lifeline financing via royalty, when the rest of the world went to sh*t. The guys have put a shit load of personal time, effort and emotional baggage into building what AVB has today ....but it is still a shame they did not put more personal $$$s into direct shares though, to reinforce the Board's conviction. Perhaps they regret that now. I don't know.
So ......go ahead Directors ....cash out, buy a nice house and a boat ....sure ....why not ...... but it is not like it is $5m, $10m or $20m net of all taxes. So I do not get it. The prize is so much bigger. The NPV of Centro alone !!!! For the sake of 2-3 years, their prize is double, triple or even more.
Reluctantly, I conclude that our Board has to be confident that 50.1% position in the hands of OZL is achievable, they get to keep their jobs for a while, plus no doubt some bigger incentives down the track under OZL management, which have not been disclosed to us.
However, based on information available to date, I do not think this is a done deal. So I will hold out for more information, more appreciation of value, and more transparency from our Board.
Thoughts welcome!
AVB Price at posting:
16.5¢ Sentiment: Hold Disclosure: Held
