This is my view. Please comment.Shares On Issue = 250 Million...

This is my view. Please comment.

Shares On Issue = 250 Million (before new issue).

The top 3 shareholders own 89% of the company.

Iluka Corporation Limited 126,967,828 (50%)
QBE Insurance Group Ltd 75,609,080 (30%)
Perpetual Trustees Australia Limited 23,875,134 (9%)

From what I have heard, I think Iluka want full control over the company (i.e. take over, in which I belive they have tried that already). I think they will just keep increasing their share holding until they own it. ILU already have 50% voting power.

I dont know what the share price will drop to on ex-divend date, wednesday next week) and I don't know if I will sell before ex-div or not yet. I might actually stick around, get the extra shares (and pay the price) and see what happpens.

http://au.biz.yahoo.com/p/c/crt.ax.html

Lets say you outlay $3500 (not incl brokerage) and purchased 5000 shares @ $0.70.

The dividend is worth $800 (5000 * .16)

You will have an offer to purchase 2368 shares (5000 / 19 * 9) (i.e. 9 shares per 19 held) @ $0.34 costing an additional $805

hmmmm. Collect dividend $800 buy more shares $805. So exactly what they said, the money raising is actually paying for the dividend.

You now have 7368 shares (5000 + 2368) with a total cost of $4305 ($3500 + $805).

Based on that the share price could ultimately fall to $0.59 (7368 * $0.59 = $4347) (i.e. you still earned $800 profit on the trade). Howver, it has a potential to fall to $0.475 (7368 * $0.475 = $3499 (i.e. your inital outlay of $3500)).

So, I have a feeling the opening price on ex dividend will be in the range of $0.475 and $0.59, but the market being how it is, anything could happen. If it opens above $0.59 then, in this scenario, you are ahead ($800 dividend plus additional increase by share price).

If the share price drops to this level, wouldn't that give Iluka a perfect opportunity to increase share holding???

What do you think????