Hi whitepointer.In a way the fact that the Luzon sp dipped...

Hi whitepointer.
In a way the fact that the Luzon sp dipped initially on news of the legal action but has now improved again is a little puzzling.

Yes it could mean that Luzon is trying to do a private placement. But why would that help the sp.

IMHO I don't think Luzon have got much for Republic to win from them.
I reckon that Luzon most probably has not been able to secure the option on Lipichi which it had to front up with money for by Jan 1, 2008.
So what does Republic hope to gain by the action if Luzon has no money and has no "assets" such as the option to Lipichi ?

A couple of theories here for what they are worth.
(a) By conducting the court case and winning RAU could clear up the issue about the "sampling info" which it carried out but did not hand over to Luzon.
(b) By conducting the court case and winning it can effectively squash Luzon ( business revenge ? - maybe too strong a call)
(c) By conducting the case it may put pressure on Luzon to reach an "arrangement" with RAU which could see RAU issued with Luzon shares in exchange for wiping the "debt" - thereby RAU could effectively "take over / merge" with Luzon.
Thereby getting exposure on the TSX and access to another source of capital. Which was one of the pluses that was suggested back at the time the original merger was proposed.

There may be other benefits that I cannot see at the moment. I don't think it is just the money ( because I don't think Luzon has the money to pay over anyway if it loses the case)

Just a few thoughts to ponder.