cba bids $7.85 for amp, page-18

re: $$no bid for amp..for grant62 Hi Troskolo,

In my view, $7.00 would clearly result in control being achieved. Perhaps as high as the 90% mark beyond which compulsory acquisition could proceed.

Of the 1.5 Billion shares currently on issue, 222M were issued in May @$5.50, and 103M in July @$4.82.

AMP last closed @$5.60 on 5th May.

Since then, 1.465 Billion shares have changed hands, almost equalling the total number of shares currently on issue.

Whilst a number of shareholders are unlikely to have sold during this time, it is probably fair to suggest that ~60% of the currently issued capital is held by shareholders who originally bought at prices <$5.60 (or who have held onto their shares since the original demutualisation).

That being the case, a $6.00 - 6.25 bid would represent a premium of 7 - 11% to them (if taken at a $5.60 entry price).

@$7.00, the likely premium, based on a $5.60 entry price, would be 25%.

@$7.00, that would be more than enough, in my view, for AMP to fall, even in the face of one or more minority blocking stakes. However, an opening gambit around the $6.00 -6.25 mark is more likely. Indeed, $6.15 appears to be the 25% uplift price, whilst $6.20 would represent a 20% uplift to tonight's closing price.

The average closing price of the last 10 trading days was $4.74 (including today's closing price), or $4.68 in the preceding 10 days, excluding today's closing price.

Using these prices as a guide, a 30% uplift will place you mid-range between $6.00 - 6.25.

This is why I am suggesting the $6.00 - 6.25 range as being the likely target zone because, to most current shareholders, this would still represent a substantial premium to their entry price.