Ann: Directors Resolve No Dividend on Class A Sha, page-7

re: Ann: Directors Resolve No Dividend on Cla... The board attempted two buy outs of the A Class. The first was for $1/share just before the GFC hit. From what I understand the GFC hit and the buyer of the Finance business dissapeared and so the board retracted the buy out offer. The board then came back after many months of not paying the dividend and tried to buy back the A Class for 67cents (this was pushed by Trojan wanting to get out)
If the A Class shares were worth the $1.20 I suspect that they wouldn't be trading at such a discounting. I have a reasonable parcel of A Class and would gladdly sell for anything above 85 or 90cents. The longer I have to wait the larger my opportunity cost is.

As for the dividend, yes the board can at any stage announce a return to the A Class dividend. What the board could do and I'm sure not many investors realise is that they pay the dividend to A Class holder for a 12 month period, then they would pay a big dividend to the ordinaries.

The numbers would be Current cash $20m, less A Class dividend $3.92m for the full 12 months plus earnings say $10m leaving $26m cash for an ordinary dividend of 77cents. On top of this if they get the $8.5m out of Hoffmeister thats a further 25cents and then if they decide to tip the business into Overdraft with there current facility of $9m, thats a further 27c cents.

The net result of the above picture is that the A Class shareholders get their 14cents over the next 12 months, while the ordinary shareholders get a potential total of $1.29 in dividends at the end of the 12 months. What's actually quite funny about this is the $1.29per share is that is within 4cents of what Ray and his daughter paid for their Ordinary shares.

With the debt on the business the board would then stop the A Class share dividend and build up cash over the coming years. For Leanne, she has got her investment out and still controls the business. The A class share price would drop and possible allow for a cheap buy back.

This is just me speculating. I suppose that the legal action in play may result in a completely different picture!?!