Do we have to sell?, page-2

Yes, my understanding is that they have to get to 90% acceptance if they want to acquire the whole company. But I think they have muddied the water in offering the alternative of an arrangement whereby existing shareholders can remain involved if they are prepared to accept part cash and part shares in an unlisted holding company. It all became a bit too complicated for me, but I can't see any existing shareholders participating in this alternative if they are locked in for about 3 years with no clear exit arrangement. It is also not very clear if REA will accept something less than full control. There is very little independent commentary on the options.

The language being used by REA is to create the impression that this is a done deal - they call it a take over, IPP call it a merger. No one is talking about a third alternative of no deal. At this stage it looks like REA and Catcha, representing about 40% of the equity, are all for it. To make things a bit more interesting, it would take an institution or big private investor to dig their heals in. They would need to have at least 10% of shareholding under their control. To date there does not seem to be anyone willing to put their hand up.

I believe the $4.00 bid is light on, but if I was the buyer, I probably would not like to pay much more, as there is risk in the health of Asian economies. However, if IPP can grow revenue at rates that have been mentioned by analysts of 30%pa for the next 5 years or so, then it is cheap.

At the end of the day, the institutions will decide if REA succeeds, but I would love to see a bit of hard nosed negotiation over price.

Regards

Westwind