Here is my take on the merger...At first as having far more in...

Here is my take on the merger...

At first as having far more in SOL than MLT I was opposed to it.

However it grew on me:

1. Todd Barlow seems to be more of an investment manager than an operational manager - my opinion.
2. He has the Milner's backing him and they have a few miles on the clock.
3. The cross holding with BKW protects me from opportunistic takeovers which steal the asset and make me look harder for replacements.
4. SOL owns 39% of PCG and management there owns around 25% . That is a respected investment house.
5. Pitt Street seem to have a real estate arm for investing.
6. Contact runs BKI and SOL owns 20% of the management company.
7. I suspect that with so much capital deployed in unloved industries who probably will struggle to find funds SOL could use another investment vehicle delivering cash flow and capital.
8. If SOL had to or wanted to raise $3.8billion it probably would have to deep discount and even then it isn't deployed. Often when all the fees are added up it is around 5%. Even the $225Million convertible note cost them around 2%.So 10% premium may not be a bad deal as it is unlikely to drop the share price.

So I thought that this is better than an LIC. They will keep the investment teams I presume. They can reward the winning teams with capital. They have operational managers in the business so an early stage investment like BTI does would no longer be off limits. SOL have done them with great success but you need a few years to bring the value to be seen. Even today BTI trades at a discount to its underlying valuations.

I don't see performance fees etc which has cost IFT some of its performance and made it harder for it to compete with SOL.

Here is the elephant in the room - They have brickyards and Coal and even Oil. BAT has cigarettes - still performing decades after they were told it would all die. So anyone who thinks BKW is Brickyards needs to go have another look, you get those for free and if they do it well they can consolidate a fragmented industry in the USA and make us all a huge amount of money. We forget that our labour rate is pretty high so our brickyards are very mechanised. The USA is starting to ratchet up labour costs so mechanisation is probably a very good tool in a consolidation phase right mow - add Covid and fewer workers sounds like a plan to me.

TGP makes enough to probably turnaround Vodafone and over time to establish a reasonable bridgehead against Optus and Telstra. The valuation isn't that demanding anymore. New Hope is probably delivering that great thing called money. They purchased the NSW mines at the right time and ultimately we need a pathway to net neutral.

Then they have their own portfolio investments and having access to cash may well make them even bigger.

All I want is a dividend and for them not to make too many mistakes. That operational investing must outperform portfolio investing over time.

So I think that MLT and SOL make a compelling argument but here is my stumbling block:

As at this afternoon: The MLT share price is $6.23.

The Dividends that are part of the scheme are 45c and the franking is 19c so that is 64c.
The deal is NTA- dividends multiplied by 1.1. So the equation ios $5.53 -0.45 equals $5.08 times 1,1 equals $5.59. then as SOL is trading above $31 you would get 0.18 shares for each MLT. So SOL trades today at $33.31 you will actually get $6.00 in value if the price stays the same so as at todays date the total value includ8ing franking could be $6,64. However on 9 August it was only $31.89 and has been pretty volatile so would I pay $6.23 and carry the risk that SOL doesn't retrace to $31 and leaves me with virtually breakeven on $6.23. No I would not and anyone thinking this is a good idea may find that after the deal SOL shares suffer from a bit of an overhang.

I personally am not buying SOL shares and think that BKW is the cheaper entry right now but I own all three - MLT, SOL and BKW