This offer is only adequate if ATA keeps its value at or above 88 cents. This of course cannot be guaranteed. If SP of ATA drops from 88 cents, the offer falls from being equivalent to 6.3 cents, if shareholders opt to take ATA shares in the offer. Based on this possibility more nvestors might decide on a full cash payout. However scaleback will limit this to 75% cash if I am not mistaken, so there is still the possibility that the offer is not equivalent to 6.3 cents cash.
There should be some provision to safeguard the offer if the SP of ATA falls.
One also has to look at the share registry of ATA which is very tight with top 20 constituting ~90% of the shares. Disposing of ATA shares could be difficult.
I would prefer a full take over of CNW by ATA for 6.3 cents. I will decide independently, regardless of this offer whether or not I want to buy ATA shares.
CNW Price at posting:
6.1¢ Sentiment: Buy Disclosure: Held
