The fundamental issue here is control. As ATC has no cash, it...

The fundamental issue here is control. As ATC has no cash, it has to issue shares to buy FNT. If the deal is completed, FNT shareholders will own around 94m of 300m shares. Why would you want to give them effective control of the company when one could simply deal with them on a commercial basis as noted above. Hence CURRENT shareholders enjoy the benefit of the boost in revenue and subsequent profits.

If FNT badly wants access to China, then ATC can arrange it and arrange to carry the China traffic over its network. As long as FNT grows so does the revenue base of ATC. Simple. A deal done on commercial terms and no need to issue shares to buy the revenue stream.

Benefits for FNT

(1) it gets a new wholesale traffic supplier on better commercial terms than current one

(2) Access to China with prepaids


Benefits for ATC

(1) Immediate access to huge revenue base
(2) No additional shares issued

SO WHY BUY FNT??

In terms of yesterdays Q1 forecast. Why would the market get exited when the supposed record revenues for Q1 will only get the company on a breakeven basis.

Can the company still continue to grow it existing revenue base in Q2? Does it have contracts in place or does it need additional contracts from China to keep growing its current business? If they get FNT business where are 30m minutes a month going to come from to carry this traffic?