Hi Yarramundi,I was out for a few hours, hence the late reply. I...

Hi Yarramundi,

I was out for a few hours, hence the late reply.

I agreee with GoNuke's assessment that Wah Nam are likely to extend the current offer for the full twelve months that the existing rules allow. I suspect they are keen to acquire any shares that current holders shed through sheer frustration during this period. I am also inclined to believe that Wah Nam's end game is to build a large holding in BRM (but not necessarily the 90% that would allow compulsory acquisition of the remaining shares) with the intention of on-selling it for a healthy profit.

If that is correct, it means that when Wah Nam has reached its target holding, it will be in its own best interests to ensure the BRM share price is significantly higher than it is currently, and stays there for an extended period. I presume it would be negotiating a sale price based on the volume weighted average of BRM shares for the 90 day period prior to the sale date, or some similar basis. Any way you look at it, it is in their interests for the BRM price to go up again, once they have finished playing their current games.

Keep in mind that if they sell their holding, it will be the BRM shares they have acquired that they are seling, not WNI shares on the ASX or Kong Kong shares in Wah Nam, so we must benefit from an improved BRM price at that stage. It also stands to reason that if they and their associates were prepared to buy BRM shares at up to $6.24 to get intial control, then they are not likely to be aiming for a price at less than that, and you would expect it to be even more again.

I still believe that this will have a significantly better ending for long-term holders than the current price indicates, even if it is not the happy ending that we all would have preferred. That could still be at least six months away though and for many full time investors, the opportunity cost of having funds tied up in BRM may be more than they are prepared to wear.

I'm sure Wah Nam are counting on this, although they are probably facing their own time pressures from associates who are keen to realize a profit of their own through an increase in value of the Wah Nam script they accepted via the takeover offer. Because Wah Nam's holding in BRM is one of the major assets underpinning the price of those shares, a rise in the BRM share price is a logical and desirable outcome for those associates too.

It's all speculation of course and I may well be wide of the mark, but it makes sense to me based on the available information at the moment and who knows what further announcements lie ahead regarding operational and infrastructure maters over that next six month period.

I'm still holding on to my shares because I don't need to sell, and at these prices I'm just not interested.

Regards,
Bones