AZZ Opinions, page-51

Well unlike some trigger happy folk here, I prefer not to make conjectures, nor do I want to act on all the conjecture spread around hotcopper.

I'm prepared to wait for the outcome, which I accept may very well be zero or not, and for the facts to emerge from that point onwards. Then I’ll decide what to do. No use running around like headless chook in the meantime, particularly while the stock is in suspension.

You keep going on and on and on about the 'no conditions precedent' thing, suggesting that the company was lying when it said this. Now I know neither of us has seen the agreement, but there is still no evidence to confirm that what management have been saying is false.

The fact that the deal has not been finalised despite the passing of the closing date is not evidence that the statement that there were ‘no conditions precedent’ was false.

Others have generously outlined some examples of why this is the case. One example was that the private equity company may have had funding in place at the time they executed the agreement, but have found with the sudden drop in the oil price that it was available suddenly not available.

This is feasible and can happen even to say someone taking out as simple as a mortgage. For example we know in the lead up to the GFC for example, some banks were giving loans out to NINJAS (no income, no job or assets). If one of these ninja’s had signed an agreement to buy a house just before the GFC hit, with no conditions precedent, on the basis they had their loan already pre-approved by Lehmann Brothers - then was unable to settle because Lehnmann Brothers went bust inbetween the time the signed it and when they had to settle – should the seller bother suing the ninja – with no income, no job, no assets?

So in the example suggested about the private equity company no longer having access to the finance they thought they had in place - management can try to sue the company, but what’s the likelihood of getting anything meaningful out of that? And how long will that take? I have no idea what the circumstances of the buyer are, and management may indeed be better off trying to work with them to resolve their funding issues, while also trying to find another buyer in the meantime.

Anyway, these are just some examples to illustrate the point. There are a range of other possibilities, but there’s no use jumping to conclusions and chucking a sook when you don’t have all the facts.