New Bid M2 all script, page-6

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    As I understood the announcement, shareholders will get .803 MTU shares per IIN share plus 75c dividend. The problem with valuing the deal is that MTU shares will keep moving, so the offer price is uncertain. At Fridays closing price it's worth about $9.25 per IIN share. The 75c dividend comes with Franking Credits so that it worth about $1.07 gross. So let's call it $10.32 as a starting point.

    The "synergy benefits" are much more rubbery in my view and assume that shareholders in IIN don't sell out, hold their new shares in MTU (for how long?) and the MTU share price increases in line with these realised synergies.

    So to compare like with like, the TPM bid was worth $8.60, which grossed up to about $9.10, as part of the $8.60 was to be paid as a franked dividend.

    The MTU bid is worth $10.32 (today) and comes with potential CGT rollover relief for whom that is a consideration (not me!).

    Conclusion - if supported by the directors, this is a better financial outcome for existing IIN shareholders.

    Of course their recommendation will (should?) consider other factors including whether M2 is a better owner of the IIN brand than TPM.

    And of course TPM still have three days to put in a counter offer.

    Conclusion - I am holding for the moment.
 
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