Ann: Touchcorp receives non-binding indicative proposal, page-5

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xerxes_ph

9,081 Posts.

13/04/17

14:32

Post #: 24060756
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Originally posted by dim81 ↑

Well well - this is concerning:
"the sale of the Company's technology to a third party while Touchcorp shareholders remain exposed to the value of Afterpay shares would give rise to significant risks which would adversely affect TCH shareholders ...(the Afterpay shares are subject to ASX escrow until 3 May 2018.)"

I.e. a new (different) owner may:
- pull the rug out from under AFY, unlikely as AFY would have set contractual obligations with TCH. (but in the long term, create upheaval to the AFY business model and negatively impact AFY SP)
- conversely mean AFY is free to change the technology platform away from TCH. (impacting both AFY and TCH).

The paragraph is intriguing as TCH shareholders are already exposed to significant changes in the AFY share price until May 2018. This is a risk that TCH holders know, and are happy to bear currently.

The issue here is whether the offer received is well in excess of $1.50 per share, in which case TCH holders are being dudded by their own board. If the offer is materially above $1.50 per share, the board should consider any premium over $1.50 when setting the equity issue and swap between the two companies. AFY holders need to contribute their fare share, rather than getting a free lunch on TCH holders.

Hiding behind confidentiality and the smoke screen of business risks is a cop out. Hopefully there will be a counter offer and these details can be fleshed out.

Cheers

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Why is the Board coy on not releasing the name of the 3rd Party and the details of the offer? Let's hope the information is made available either by the Board or a trustworthy "leak". Even at $1.50 this company, given its potential, seems undervalued. Cloak and dagger machinations where shareholders are left in the dark is not a good look. We need more transparency and upfront detailed communication from the Board.

TCH Price at posting: $1.43 Sentiment: Buy Disclosure: Held
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