Ann: Net Tangible Asset Backing - 31 May 2024, page-5

I can only speculate as to why they ae doing what they are.

The small fortune paid to the Consultants for the strategic review most likely included a tax minimisation strategy for LC.

If they keep the SP low they can take ECL private in LC's Super fund giving her massive Franking Credits to play with.

If they liquidate I suspect LC is scared that she may crystalise a tax bill and doesn't want to hand it to the ATO.

The game plan may be a repeat of what LC's father did with REA. Low ball offer, taken private ad then flipped for a significant profit in a very short time frame. I suggest that LC will want to keep the vehicle and not crystalise the potential CGT.

My thoughts only.

A smart investor in LC's Shoes would be looking at the easiest way to get out of an Listed vehicle. They would offer a reasonable price to take it private leaving themselves with some upside. The longer that LC holds onto this the more costly it will become leaving her with less which doesn't make sense.

The other alternative is simple as, they have a plan to take it private but don't want to make it public as it will push up the share price making any Takeover offer more expensive. They are also waiting on the final earnout from the sale of the electrical business.

Nothing makes sense as if this was the case, why isn't LC buying up on market?

No matter which way you look at it, ECL needs to be either wound up of LC takes it private but it will be at full value as a lot of shareholders have held for a long time with little return.