In my view, selling the management business would be a disaster...

In my view, selling the management business would be a disaster for CNP shareholders.

I’m talking here about the idea of spinning off the management business, (as opposed to an offer for the whole group which is unlikely at this stage)……

A spin off (of the management business) would be fabulous for the banks who would improve their positions by taking some cash from the sale price and of course the buyers who would get an excellent cash flow business with a long term future.

Presumably the buyers are also looking to pay bargain basement prices for this “excellent cashflow business”.

This situation would not be dissimilar to the RAMS debacle.

When it all got too hard, “RAMS management” (aka John Kinghorn), sold off the brand and operating (cash generating) part of the business to Westpac and left the ordinary shareholders holding the assets (in this example the existing RAMS loan book) in a run down situation. For the shareholders, this meant a not very exciting investment with no long term operating future.

For Centro this could mean being left with the property assets however with no income (cashflow) from the shopping centre management business.

All that is left to do in this scenario is then to run down the assets through sales of the properties and see what’s left for shareholders after the banks get the balance of their loans (including all that capatalised interest).

In other words, we are talking about de facto liquidation.

If the shareholders do have any power, it would be a test to vote against this outcome.