So what is this telling us? Well, after a week it would appear...

So what is this telling us? Well, after a week it would appear that an agreement has been reached with Macquarie on the “various conditions for due diligence”, however these conditions appear pretty balanced, in that neither party is too constrained. ie. no break fees for another proposal, and Macquarie are free to walk away if they want.

We obviously need some more capital to firm up the reserves in the Mereenie Stairway, and the final paragraph ensures that Macquarie can still be our lending buddies if the takeover goes nowhere. Would assume one of four things will happen;

1. Macquarie comes in with an offer the board and the majority of other shareholders accept
2. Macquarie makes a revised offer that is rejected by the board, but in the process places a valuation on the company that can be used as a basis for further borrowing capacity
3. Macquarie makes a revised offer that is rejected by the board, but is thereafter used as a basis for a CR which Macquarie underwrites and thereafter becomes the cornerstone largest shareholder
4. Macquarie walks away, and required capital funding is sought alternatively

Imagine Options 2 & 3 are the most likely, and personally I hope it’s No.2.

Whatever the outcome of the above, I have faith that RC will look after Minority Shareholders, as his legacy has done to date. Would encourage all who haven’t done so to join the CPSA; it’s positive power most likely won’t be required this time but imagine it could become very important when the next (less friendly) vultures start circling in 12-24 months time.