Don;t get carried away now.On an Enterprise Value basis, IIF...

Don;t get carried away now.

On an Enterprise Value basis, IIF would attract at least 16c...maybe 30c. However, if there is a change of control provision in the lending covenants and the banks want out NOW then the potential suitor would have to stump up around $2.2 Billion - $1.85 bil for the borrowings, $120M for their current liabilities, and $180M for the market cap (at least) minus their cash (not much) and minus their nett tangible assets ($244). Their non-liquid assets (book value sub $2.3B) would then be bought by the suitor for basically nix.

However, someone still has to have $2Bn lying around burning a hole in their pocket. This isn't the Japanese, who are facing a sodding great recession. It is possibly the Arabs, but they aren't loving this crap oil price.

If someone wished to avoid the change of control provision - which would trigger the debt to be repaid in full within 30/60/90? days - they could make a shot to buy 49% of IIF in one shot. But again, 19.9% is a hurdle and they'd have to mount a partial takeover, which is stupid; you would enrich current holders but not solve the problem.

Or IIF could tie up via an equity issue with a major investor, by selling 49% of the group's capital. It would go to a vote of unit holders, who'd probably cave and allow it, only so long as this 49% was sold so as to nix the covenant issue entirely. To do this, we'd be looking at 60c plus to raise $750M. Given that IIF is only at 16.5-17.5c now, a 400% premium to the price is a bit of a stretch for a business - so you'd be looking at a charity like the Salvos I suppose.

No takeover. No white knight. What's most likely is the banks roll the covenant change and cross their fingers. Or they drop the change of control provision and someone can then offer a price for our equity which, i hope, is more than 25c.