Ann: Trading Update and Capital Raising Presentation, page-64

"I view (rightly or wrongly) BWX as an attractive takeover candidate, especially from a trade buyer. That was the case before the shocking trading update and surprise cap raise, and the case is firmer now."

Not sure I agree: the trading update - for the very reason that it was indeed shocking - would arguably make it less appealing to a would-be acquirer, despite the lower market value of the business.

That said, I note there is something like $22m recorded as "Corporate and Administrative Expenses", and while I have no idea what corporate and administrative functions can possibly consuming $22m pa, it is a massive number, and his highly material not just in the context of the company being barely profitable, but even when compared to the projected FY2023 EBITDA of $47m (and if they get to within $10m of that figure, I'll buy you a gold fish).

So a new corporate owner (not an investment fund or a family office) could easily eliminate maybe $10m, in duplicated fixed cost overheads, which would probably make the difference between the company being profitable, or loss-making.

But, it's a hard one to envisage, because any new corporate owner would still be faced with integrating the recent acquisitions that were made, and do this against a backdrop of increasing consumer uncertainty combined with input cost inflation.

Lots of very complex balls in the air here, and I think it would only be a not-so-smart operator who took on the juggling act.

Besides, you know the time-honored lesson:

"Never invest just on the basis of perceived takeover potential; always buy the right fundamentals because its the right fundamentals which others also want to acquire".

And while people get excited by takeovers (the psychological "hit-the-jackpot" effect), they are actually not very common. You could buy twenty stocks that look like clear takeover targets and only one - or even none - of them gets bid for.


"Tatterang increasing their stake (and also being associated with Twiggy) is curious in that context."

Much gets thought about this, I'm sure, but it's unclear to me why it is much of a curiosity.

After all, they are institutional investors like other institutional investors. And, just like other institutional investors, they get many wrong,

Heck, they were buying into this company at a price 60% higher than it is today, just two weeks before the huge downgrade, so I'm not sure what the basis is for deferring to their investing prowess.

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