Seven would be nuts not to try a complete takeover of ENG.
Firstly they have lost a chunk of change so far and would like to recoup it.
Secondly, it is clear that if managed correctly ENG with it's $20M revenue and 40% margin and 28% revenue growth rate would be a great business to own outright.
Thirdly, Seven does not share. Shareholders are a pain to have to deal with what with reporting & dividends, AGM's, etc. Look at Unwired, they took the lot. What ENG shareholders are good for however is raising capital as we have now seen with the ENG share register up to 635,000,000 shares!
If Seven owned ENG, through economies of scale instant savings could be made by merging them with a compatible business unit such as Unwired, if they keep that or maybe the TIVO division.
So, if you believe that Seven will try a complete takeover of ENG then you must come to the conclusion that ENG SP will not be going up anytime soon.
This is always a problem when a company like this has such a large shreholder, the little guys will get screwed. First thru capital raisings, then a SP decline and then a low ball takeover offer when it is on it's knees.
Of course Seven could also walk away from ENG and if it wants VOIP it could buy backend from ENG, FRE or Symbio/MNF. Maybe if Seven buy VOIP backend from ENG, this will lift ENG SP allowing Seven a managed exit at a higher SP?
Who really knows? Seven does and I would prefer not to be a minority shareholder in ENG with them at this time.
Again, I conclude, VOIP is undergoing explosive growth at present, ENG are unpredictable from a shareholders point of view, the safest investment bet if you want in on VOIP growth, simply put is MNF. I expect them to continue their 100% growth rate this year like they have in the last 2 years.
ENG Price at posting:
$1.10 Sentiment: None Disclosure: Not Held
