With the AGM next week and Tassal's this week this is an...

With the AGM next week and Tassal's this week this is an appropriate time to go through some options I think will surface over the next 6 - 12 months.

1. Futuris has a new CEO and seems to have indicated its time to clear out the 'small' bits it owns. It's stake in WBA is currently worth $17.5M and 'small'
2. Earlier this year Tassal IMO quite clearly did not want WBA to participate in its share issue and wanted WBA's holding diluted. With WBA quickly then (regretfully) 'rushing' to buy shares on market in TGR, to bring its shareholding back up, you cannot draw any other conclusion. You don't, though, go and upset your biggest shareholder unless you have a good reason for it. Anyone any ideas? Maybe FCL wants a bite of TGR directly?
3. One of the resolutions for the WBA AGM is for the board to have the freedom to do whatever it wants in regard to its 26% holding in TGR currently worth approx $61M. This can only mean WBA's stake in TGR is on the move

With the above we have some interesting options coming up:(I assume current share prices which is highly unlikely)

1. WBA sells its TGR holding to FCL and then buys back FCL's holding in WBA.
2. TGR finds instos to buy WBA's stake. There maybe some who would like to average down if they subscribed to the shares TGR issued early in 2008 at $3.85.
3. WBA finds a buyer who wants to bid for TGR.
4. any combination of the above

WBA has also upped the ante on TGR by putting up an additional WBA director for TGR maybe in reprisal for its exclusion in the TGR share placing. You also have Chris Corrigan as a director now for WBA so I cannot imagine WBA standing still for much longer doing nothing. (shareholders voting him up last year would have done so thinking along these lines. WBA has also conspicuously not appointed a long term CEO over the past 6 months so maybe a major change in the business is imminent.

IMO any of the above four options are positive for WBA.

With WBA currently valued by the market at $53M (sp of 85c)and its stake in TGR valued IMO at $59M after tax (in the unlikely event of selling its controlling stake at the current TGR sp of $1.75)this has to be a deal worth doing for WBA shareholders. With $59M cash it can buy out FCL pay off $18M debt and still have maybe $30M cash in the bank. This would mean cash backing per share of 70c plus 2 businesses that made an EBIT of $4.85M in '08.

Nothing's for sure in this current market but WBA looks set for an interesting six months