Thanks Japes & Inform. My take is I’m trying to stay open to all...

Thanks Japes & Inform. My take is I’m trying to stay open to all possibilities whilst keeping an eye on what’s most probable - bearing in mind we all have different situations and desired outcomes. I’m also interested in hearing as many other views as possible as this situation continues to unfold.

I still see many possibilities and it’s a volatile landscape. Things to consider are:

Weiss can continue mopping up on behalf of LG. Maybe they’ll try to mop up at 1.8/1.9 if they can and pull down more sellers to 1.9/2 cents range. Hopefully after that they will have to go harder and chase. But clearly LG will want to gain as much as they can as cheap as they can before considering offering any increases.

Whilst unlikely Weiss & Centaurus can now form a blocking stake.

Centaurus. Whilst they have sold down at various times, they have never gone away. I honestly can’t tell if they’re in it for themselves (like we all are) or are working in tandem with Weiss/LG. For now it doesn’t matter to me. My hope is that they represent a reasonable chance for us to extract a premium in the short term.

It’s also possible that Centaurus might offload some shares as well even at 1.9-2 cents. Reason being that they have parcels bought at 1.3-1.6 so they can take some decent profits there if need be, if they get nervous.

Keep in mind that there are other possible large shareholders under 5% who are just waiting like all of us until the last minute to make up their minds, so things could still swing rapidly. Japes whether they could be affiliated with LG or not I don’t know.

LG could extend the offer again. The LG letter dated March 14 implies they could (but it doesn’t say on what basis).

LG could revise the offer and thereby be given a further two week time extension. In the Target Statement (on page 9 of Annexure B) it mentions that LG has the facility to issue 142m ‘consideration shares’ without going back to their shareholders. From memory they have planned to issue 80.5m LG shares in consideration of all SBL shares. So there is scope for them to increase their offer to maybe something like 1:30 instead of 1:34 as it currently stands. However, that offer would have to apply to all shareholders even those that have already accepted the LG offer.

Lack of liquidity could be a problem if LG don’t get a 90% holding. That’s like starving us of the chance to exit. It looks like they’re trying that over the last few days. The buy side has fallen away today and the trading after March 19 has been very light considering we potentially have 2 days left for the offer to expire. Throughout the offer period the buy side has got quite weak at times but I think that’s an attempt to spook us. Today the sell side outweighs the buy side. I’m sure that will spook some current holders, but hopefully not too many.

It’s also possible that LG can wait it out as well. Say the offer ends and they have 75% of SBL. Maybe they will sit quietly for quiet awhile and try to frustrate us out and then gradually move to 90% and compulsory acquire after that, which they can do. (See section 6.12 of Target Statement).

As someone else mentioned the directors converting their 55m options happened a bit earlier than expected which is a good sign for us, as it means they may have been struggling for acceptances. Having said that we still haven’t seen a notice that Bill Oliver has off loaded his 10m new shares to the LG offer. To date all we know is that he has converted 10m options as per the recent 3B notice. Surely at the very least an Appendix 3Y Statement should have been triggered by the issuing of new shares to a current director?

Also I’m not sure how often LG has to update us about their holding now that they have over 50%. Below 50% I thought they had to account for 1% increments.


So they’re some of the possibilities to juggle, but what’s most likely? Honestly - I don’t know and everybody will need to find their own comfort level.

At a guess given the light trading since Monday, we haven’t heard much from LG, Weiss or Centaurus, so it makes me think there’s a bit off a standoff for now.

Maybe on Monday we will get a Change in Substantial Notice from LG, as I can’t see us getting one before then.

Based on previous stated substantial holdings, the recent low volumes and having waited this long I’m still prepared to wait and see as we have some room to move if need be.

At the moment with etrade I have sms alerts set for price movements, notices and volume increases and I find that very handy in dealing with this situation as changes arise. Also it doesn’t hurt to revise the Bidder & Target statements just for one’s own peace of mind.

glta holders.