Game On Takeover Time, page-50

Whoa there TsS, Whoa!

Let's back up a little and look at the LOAME question with a forensic mindset.

Firstly, nice spotting re- the apparent LOAME discrepancy. I saw the 603 this morning, but I didn't make the connection with the discrepancy that the 80m / 6.36% implied. Nice job.

Short Answer:

- I'm pretty confident that this new LOAME holding is the result of an acquisition made through the bookbuild, via Petra (i.e. 80m @ 5c = AU$2m). I also think that LOAME will not be a substantial holder because it will not be 6.36% of the new issued capital base. Their holding will be more like 3% (i.e. 80m / 2,638m shares). Basically, I think they have jumped the gun and in doing so, have used an incorrect total shares issued denominator when doing their math (see below for details). 

The substantial shareholder threshold nowadays will be ~132m shares (i.e. 2,638m x 5%) and 80m is well below that.

Memo to LOAME: Thanks for the Form 603, but not required. The intel is nice to have, though. Many thanks! (They're gonna need to lodge a Form 605 'ceasing' now...) 

Long Answer:

- Was it an on-market acquisition? Doubtful. The notices states a Date of Acquisition of (Tues) 18/09/18, but there was simply was insufficient recent volume (ASX and Chi-X) to allow that to happen - even if you spread it over several trading days.

- I also wondered whether it might have been an unrelated off-market inter-related party (non-cash) transfer, but I don't think that's the case either. IRESS reports the current Top20 list (last updated 31/08/18) and the only two possible candidates with sufficient holdings (prior to the original sophs placement and subsequent rights issue) were Forrest Family Investments (120m) and JB (85m). We know neither of them would be the counter-party to any such transaction.

- I think the person who completed this Form 603 made two errors:

1) The AU$2m listed as "non-cash" consideration should have been "cash", I think. I suspect they got confused between the concepts of on-market/off-market v. cash/non-cash. The bookbuild was an off-market cash transaction; and (more importantly)

2) This 6.36% shareholding number is based on the superseded 1,258m total shares on issue immediately prior to the rights issue placements (i.e. 80m / 1,258m = 6.36%). I suspect that the person filling in the form simply looked for the most recent 3B to obtain the current total shares on issue, without understanding the broader context. If they had only until after this afternoon's 3B had dropped and based their calculations on it then this apparent confusion would not have occurred, imo.

- I reckon this is just a good old-fashioned human stuff-up. I thought the Swiss were good with numbers...