Dear MacBank,
RE: Take Over Offer of 20 cents
Today the shareholders were advised that your organization made a second offer to buy Central Petroleum Limited at the risible price of 20 cents plus a promise on the never never.
Remarkably our board of directors recommended acceptance of the offer.
No doubt you are aware that Macquarie Bank has often been criticised as being neither “fish nor fowl” because Macquarie Bank exhibits;
“characteristics of an investment bank, asset manager, buy-out house, private-equity arranger and hedge fund. Perhaps that is why the custom has become simply to enumerate the assets under its control - a cliché beloved of the news media that nonetheless conveys something about Macquarie's diversity and geographic spread. Airports, antennae, casinos,car parks, turnpikes, tunnels: whether in Canada, Korea, Britain, Belgium, Singapore, Spain, Taiwan or Tanzania, all come alike to Macquarie's sophisticated metrics and financial heft.”
https://www.themonthly.com.au/issue/2007/july/1240964771/gideon- haigh/who-s-afraid-macquarie-bank
Who’s afraid of Macquarie Bank?
“The story of the millionaire’s factory”
By Gideon Haigh
It is abundantly clear that you now wish to add Oil and Gas to that substantial portfolio and take advantage of your ability to sniff out and create deals that the ordinary investor can only dream of undertaking.
It is axiomatic that Macquarie Bank does not enter into any commercial deal that will only produce 100 or 200% profit to the bank.
The reality is that the Bank looks for deals that will provide it with returns of around 3,000 or 4,000 % profit within a short time frame.
It is without question that you are lawfully entitled to seek out any lawful opportunity and capitalise upon it.
Your recent Joint Venture with Brookfield Capital and the formation of Quadrant Energy by acquiring the assets of Apache Energy Ltd and the subsequent purchase of 50 % of Mereenie from Santos, all support that position.
The question is therefore, can you also gobble up Central Petroleum Limited to become an integral part of your planned program.
The answer is “possibly”, but subject to one very small but important obstacle.
At the moment your offers appears to be on the, shall we say in a polite manner
“on the low side”.
And therein lies the problem.
I need not bother you with stories about “long suffering shareholders” and “a reasonable profit for all the years of investment” because to do so would simply fall on deaf ears, and I already anticipate the “Yawning of disinterested bankers”
No, I do not appeal to you to think of the shareholders, But I do say this,
“The shareholders will make you think of them”
At the moment the company has approximately 8,000 shareholders. A great majority of these are Mums and Dads, who own a small amount of shares per holding.
As the Board has recommended acceptance.
That the first hurdle overcome.Sort of like breaching the moat of the castle.
The next obstacle you now have to overcome is to get the majority of those voting on the special resolution to vote to accept offer,but, here is where your start to meet very stiff opposition as you will also need to have at least 75% of those shares cast in any vote to accept your offer.
A simple majority will not suffice.
I can assure you that this 75% obstacle is not insubstantial.
For each 1 vote the CPSA have garnered, you will have to find 3 votes to support you. Not an easy task. The shareholders only need to have a voting block of 26% (of all shares) ie 430 mill on issue, we need approx 107 mil to vote your offer down.
Naturally not every share holder will vote. I will therefore assume a generous 60% of shareholder will vote, probably far less.
So if 60 % of 430 Mil vote that is 258 Mil, let’s say 260 Million.
It also reduces the number of votes we need to block you, down to approx. 65 Mil.
So how many shares do we have access to, so as to block your offer?
Well let’s just say we are extremely confident that the shareholders will make the final determination of this issue.
So, given that your offers are, shall I say again in a polite manner “on the low side”.
Please feel free to consider how important Central Petroleum Limited is to your grand plan. We as shareholders think that it is critical, but of course you are not going to tell us that are you.
So you will understand why we as the “voting block” of Central Petroleum Limited will stand united until we see a significant benefit to us.
Many years ago Central Petroleum Limited engaged the services of Mr Richard Cottee, I affectionately call him our “Junk Yard Dog”.
In conclusion we welcome your little foray and interest into Central Petroleum Limited, it has been financially beneficial to shareholders in raising the share price and placing us in the market place as being in play for other sensible parties to make a better offer.
But I can assure you with a high degree of confidence that any new offer will need to be magnified by a significant number of multiplications before the “voting block” agrees we are satisfied.
In the meantime, please feel free to continue with you program, we shall keep a very close eye on your program to dominate the gas market so that we may fully comprehend the significance and effect of any decisions you are making.
Camdenbob.
Dear MacBank, RE: Take Over Offer of 20 cents Today the...
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