"I expect they will suspend the dividend indefinitely as the first card played". Dividends are already suspended mate. They have been for the last year or so. Minor can announce a suspension of dividends but doing so would be like me applying the brake at the request of my missus despite the car not being started, still being in park and the hand brake on. It would be symbolic only.
To run with the analogy, Minor didn't get into our car to just sit there indefinately. They got in to take it somewhere. Sure they want the rest of us to get out first but they are not going to sit there indefinately if we refuse to give up our seats.
Minor saw Oaks as an opportunity to increase shareholder value, ie that of Minor shareholders. To do that they need to increase Oaks earnings and reinstate dividends. But first they will want to renegotiate the debt with lenders to cheaper rates. They need to do this to reduce their risk but all shareholders will benefit from this finally being resolved.
With debt issues behind us focus can finally be returned to the excellent earning trend that has emerged over the last year or so. Profitability will increase considerably and no doubt Minor will want to put Dubai to bed ASAP also. What then ?
Sure Minor will try and release some horrific overstated "current situation" announcements designed to strike fear in shareholders and encourage them to sell but they can only do that for a short period of time. With their own board in place they will become accountable quite quickly and expectations of Minor shareholders will be that they get the situation in order ASAP.
Talk that they will allow massive payments to their own directors are a little silly IMHO. Remember that Minor represents the interests of its shareholders, not the preresentative directors they put on the Oaks board. Minor shareholders don't benefit from a few of their directors or local representatives filling their own pockets. Minor shareholders will expect to see Minor grow Oaks earnings ASAP as reduce the current risks. Oaks shareholders want the same thing.
I don't doubt that they will play games but we need to keep it in perspective. I don't forsee them reinstating the dividend in the next few months but I don't forsee them keeping it suspended indefinately either. They have about 6-12 months to flush us out, after that they will be shooting themselves in the foot if they keep playing games. Action on key matters should be expected in very quick order because Minor can't afford not too.
Minor may decide to simply accept that they only own about 55-60% of the company and get on with business. They may make another offer in a few months time hoping for a better response. Most likely they will simply extend their offer on the eve of its expiry thus holding the price steady.
OAK Price at posting:
52.0¢ Sentiment: Buy Disclosure: Held
