Like most on here, I don’t really understand this transaction....

Like most on here, I don’t really understand this transaction. Given the directors have unanimously agreed to this divestment, which is, in short, to own 20% of Opin instead of the existing 100% ownership, they must believe that a greater Net Present Value (NPV) can be derived from only owning 20% of Opin.

I can only picture two scenarios where this could be valid (please feel free to add additional scenarios that I may have missed).

The first is that Opin actually has a negative present value and therefore giving up 80% would be beneficial, however if this was the case why wouldn’t they be selling the entire business for $1 instead of 80%.

The other scenario is where they believe that greater value can be derived from a 20% ownership of Opin being externally managed as opposed to 100% ownership and internally managed. But if this were true, wouldn’t that be an admission that external management is at least 5 times more effective? And consequently, an admission that the current board and management is ineffective?