On 4 March, Wah Nam sent the ASX its latest notice of variation,...

On 4 March, Wah Nam sent the ASX its latest notice of variation, extending its takeover offer to 15 April. It will be interesting to see if Wah Nam continues with this tactic by issuing a further extension on or around the 4th of next month and monthly, thereafter. I always assumed they would continue doing this for the full 12 months from their initial offer, as allowed under current rules.

The more I think about it, the less I am convinced that Wah Nam will continue to do this for much longer. On each occasion they offer a further extension, those who have already accepted their offer get another opportunity under Section 650E of the Corporations Act to withdraw their original acceptance, effectively reducing Wah Nam's chances of success. I get the feeling that this will constitute a growing risk for Wah Nam, given the recent poor performances of their share price in relation to BRM's and the decreasing attractiveness of their offer. I suspect this is a risk they will become increasingly reluctant to take. I understand that the take-up rate of their offer is really quite poor, so a situation of a net reduction in support through another extension is not beyond the realms of possibility.

I will be waiting and watching around the 4th of April to see what Wah Nam choose to do. If they fail to extend beyond 15 April, that will speak volumes about how nervous they remain about their chances of success and their need to keep current acceptances locked in. If they do extend, then let's hope that a large number of their previous acceptances are reversed by BRM shareholders who no longer see any advantage in supporting Wah Nam.

Regards,
Bones