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54.5¢ slater & gordon limited

I am also not sure about how I want to vote. I will wait for the...

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Successwillcome

2,060 Posts.

312

01/07/17

13:01

Post #: 25606188
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Originally posted by mbarring ↑

What worries me most about the recapitalisation proposal is the potential for compulsory acquisition of the remaining 5% against shareholders wishes.

I write from the point of view of someone who wants to invest or hold at current prices to participate in a recovery of the business.

I believe that the shares are currently probably fairly priced by the market subject to a significant risk premium.

I also believe that the business operated efficiently can recover and generate 2-3 time growth with sustainable dividends over a 5 year period. I expect this is the scenario the new owners anticipate and desire. It is the outcome in which I want to participate.

And here's the rub. With a 95% holding the new owners cap proceed to compulsory acquire the remaining shares and deny current holders the ability to see a substantial return.

I admit my understanding is only at the google level, and would appreciate comments from anyone more knowledgeable.

http://asic.gov.au/regulatory-resou...es/rg-10-compulsory-acquisitions-and-buyouts/

Why do the hedge funds need 95%, surely 80% would ensure their control, repayment of their debt costs, and healthy return on equity.

I assume they want greater than the 90% acquisition threshold so they can have all the profits and not share nicely with existing loyal and supportive owners.

I would like to think that the final agreement can be reduced below the 90% threshold, or that the new owners provide some kind of binding assurance that they will not proceed to compulsorily acquire.

Of course, that is what I hope, and the basis on which I would make any further investment at current prices, but I have no idea how to facilitate that outcome.

I do think current owners do wield some power as the best interest of the hedge funds is served by continued operation of the business, and to do that they need shareholder approval.

While denying agreement may be ensuring our shares are worthless, I think I prefer that to having my investment ripped off by greedy hedge funds who want it all after already being very well rewarded for limited risk.

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I am also not sure about how I want to vote. I will wait for the 2017 full year results before making up my mind. Nobody likes being ripped off so happy to show the hedge fund the door if necessary.

It is interesting to see so many posters taking credit for what happened (ie saying that this was exactly what they predicted).

Can these posters please provide a link to when they predicted this scenario so we can check?

I certainly have no problem in giving credit where credit is due but when someone is misleading or even lying to the forum I have a problem with that. So link please or your credibility is heading south.

The reason I am asking for this is that I have read quite a few posts lately and none of those had outlined this newly presented D4E scenario.

Happy to be proven wrong though

As I have not read all the posts.

SGH Price at posting: 8.1¢ Sentiment: Hold Disclosure: Held
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