@caketin - Yes I was contacted on behalf of a company investment...

@caketin - Yes I was contacted on behalf of a company investment I deal with and once confirmed that we would take up shares it ended up in the institutional placement. Not my idea of fun as the company doesn't get to delay its decision and has to part with money this week. That's why you will see that the retail component has dropped to around $25 Million because I reckon there are plenty of shareholders that they contacted.

Whilst I agree that the placement is underwritten normally there are fees that are shared between the underwriter and those taking up shares via placement. It would be my understanding that the brokers have probably farmed out their risk in this placement. The risk is that assuming the person taking up the placement is say getting 3% then they can sell at 69.25c and break even as they are getting the dividend. In reality, if they hold for 45 days they also get the franking credits and can sell and generate a tax loss for the dividend...

So I do expect there to be a shortfall amongst shareholders which will be farmed out but I am not so sure that we won't see weakness unless the company does the deals by end-March and puts out some understanding of the deal and a revised forecast for the year.

Personally, I think this is just too small for a number of institutions and those that are in this space also don't like the imponderables - The seasonality which I think is more about capital equipment and project related. The lack of positive half-yearly cash flow and then the unwinding that occurs in the second half and I think they have reached their limit of selling this on an acquisition basis - They now need to show synergistic and organic growth to become a truly desired business...

All my opinion.