slyasian spot on.I just want to clarify one thing. The article...

slyasian spot on.

I just want to clarify one thing. The article harps on about GMG having a large balance sheet entry for goodwill and intangles. By definition this isn't included in a NTA calculation such that write downs here won't impact reported NTA - but will be pushed through equity accounts.

Dilution would occur via a rights issue or asset write-downs. Also expect dilution via cap rates to pushing out at the very very least 150bp.

I wouldn't be looking so much at stated NTA because you really have very little idea how NTA will look post results and the equity raising (seems like its trading cum equity atm anyway). Ofcourse you could model this out pretty easily.

The more the stock is pricing in equity raisings as opposed to takeover talk then i'm a little concerned that either i'm reading this wrong or the market is pricing it wrong. Usually the markets right!

Now it would seem to me, that if CIC wasreally interested in doing an equity raising they would not have provided bridging facilities. They would have let the takeover speculation move the stock up and then raise at the higher stock price as was suggested by merrills.

I think what you are see here is CIC giving bridging finance on the basis that if it doesn't GMG falls over (i.e. won't meet its short-term obligations). By leaving other commercial banks out of it, CIC ensures that on an eventful privatisation it isn't buying out banks from expensive bridging facilities with horrible terms. It's effectively buying itself out.

Potentially whats taking so long is DD, although you would have that they could accelerate all of this? It actually works nicely for CIC to lower the price in this scenario if infact their intention is for the whole company.

If a t/o was announced CIC would have options in the money big time. How would it play out if GMG shareholders then rejected it and took the equity raising route?

I see only upside for the stock on that thesis.

I don't hold don't have the capital for it right now.