Four changes if compared with the 2016 trading policy update.2 -...

Four changes if compared with the 2016 trading policy update.

2 - Defined Terms

- A "quarter" definition was added

- A "quarterly holding" defintion was added


5 - What is dealing in securities

- A (c) was added
granting, accepting, acquiring, disposing, exercising or discharging an option or other right or obligation to acquire or dispose of securities.


6 - When employees may deal

- A (b) was added
Limit the disposal of company securities to 20% of the emplyee quarterly holdings


7 - When a designated person may deal

- A (b) was added
Limit the disposal of company securities to 20% of the designated quarterly holdings



CONCLUSION

- Trading polycy has to be updated from time to time to take into account changes in the law or common practices. It may well have nothing to do with 4DS situation.

- But, the limitation of disposal to 20% of quaterly holdings is strange. One could ask if it is even legal.

- A limitation to sell could be interpreted as bearish.

- But ... It depends at what price !


As per 5 : "What is dealing insecurities",
the 20% limit apply not only to outright sells,but also to option or "other right or obligation to acquire or dispose of securities".

It means that Employees and Directors cannot enter in some kind of pre-bid agreement to sell later at a specified price that will not be disclosed.

This limit the possibility for a Director or an employee to enter in an undisclosed agreement to sell to a potential acquirer all their shares. Directors and employees can still do that but the agreement has to be renewed 5 times to get all the shares of the potential seller.

It could be difficult to asses if anyone entered in a prebid agreement or not. But it certainly gives the board a tool in case of potentiel litigations after an hostile takeover bid.

- Imo, the announcement is positive for shareholders, if anything, it shows that directors are taking all dispositions to make the company ready for a corporate transaction : repeatability proved and all emplyees having signed a new trading policy limiting leaks and pre bid agreements.

My gut feelings (we have to ressort to that with this Co) is that large blocks of shares have already been sold to one or more bidder(s). That could explain that the price refuse to drop despite middly negative announcements (the last one implying more delays imo).

The 4DS share price seems to have a life of it's own, whatever the sentiment of average shareholders.
But TA expert may not agree with that.

If true (partly sold, directed price), this could lead to a somewhat desapointing takeover price.



PRICE HYPOTHESIS IF TAKEOVER CONDITIONS HAD BEEN ALREADY SETTLED

Just an idea, but there was no trade for the last day of the month for 4DS (due to TH), and a big jump up for WDC for the mast day of the month.
This give us - for the last three months and on my calculations - an average price of :
- A$ 0,1559 for 4DS
- A$ 65,841 for WDC

In case of a scrip for scrip takeover by WDC, the offer could be 100 4DS shares for 1 WDC shares, which gives us a price of A$ 0,658 or US$ 0,50

That gives us :
Global selling price = 923 millions A$
Scrip for scrip = 100 to 1
Selling price of 4DS share = US$ 0,50

Absolutly nothing to sustain this hypothesis, but the numbers are rounding nicely.


NO FINANCIAL ADVICE