So the buy-out offer is now extended to 4th December. The Kin...

So the buy-out offer is now extended to 4^th December. The Kin Group justify this extension on the following grounds, I quote:-

Since our last update, macroeconomic uncertainty and global conflicts have continued to escalate, with rising economic concerns from high inflation and interest rates. Since the announcement of our Offer, the ASX All Ordinaries Index and the Australian dollar have declined, and input commodity prices remain elevated.

1. There's not a shred of evidence that 'macroeconomic uncertainty' has increased.

2. Global conflicts continue to escalate. By this, I presume, they mean the Israeli Palestinian war. The general consensus, however, is that this conflict will be contained. It's a bit of a stretch to suggest that it has any bearing or influence on the operations of the PACT Group.

3. Rising economic concerns from high inflation. Well actually the economic indicators are that inflation has peaked and is beginning to come down.

4. The RBA has just posted a 0.25% interest rate increase. The consensus here is that this could be the last and next year we will see these rates easing. Interest rates only seem high because of the recent abnormally low interest rate environment that has prevailed. And, these recent rate hikes have only been imposed to help bring inflation rates down.

5. Yes, the All Ordinaries Index is certainly experiencing a market pullback, we are in a classic bear market right now, but this is the environment when many astute investors look for bargains, like for example, let me think, like the PACT Group !!! And sure, this last quarter of the year is going to be challenging, but as one of you says, it depends if Sanjay has done his home work.

6. The Australian dollar has declined. So what?

7. Input commodity prices remain elevated. Well of course, if margins are being squeezed the only recourse is to pass on the price increases; it's part of the inflation environment.

   
   

So none of the reasons they list for selling stack up. I presume this takeover strategy is being orchestrated by the Kin Group which as I understand it is an investment house; they don't actually do anything themselves; they just invest, that's their business. It's not surprising, therefore, that they would see other investors (that's us) as competitors. Thus the strange situation in which they think owning all the shares offers them the best return while trying to convince us that we should sell. They take the opportunity of thanking the 617 shareholders who have sold out at $0.68. This is hardly a ringing endorsement; indeed it's more like a crushing embarrassment. It clearly shows that shareholders are not convinced by their spin. Indeed, the entire takeover strategy seems a bit perplexing. If RG wants to increase his ownership level, then why not continue with the policy of picking up shares when he has a few million dollars sitting around with nothing better to do.

In the mean time we have the AGM on the 16^th of this month.

It is possible that the Board and CEO will find themselves in a somewhat invidious position. At the end of the day the Board will have to decide who they support, one shareholder or all the others. A move of support for the former will become evident if we witness any softening from the positive statements made in the company's recent report.

It should be remembered that while the independent report disagreed with the offer statement on a whole raft of points, there was one finding that I thought particularly telling. They said the takeover offer was 'opportunistic'. This word carries with it all sorts of connotations, none of them flattering.