Hi Adl, I'm of the strong opinion that MEO management should...

Hi Adl,
I'm of the strong opinion that MEO management should actively court a TO as I feel this offers shareholders the most attractive value proposition going forward. Over the years MEO's business model has clearly not been successful at creating sustainable shareholder value instead accumulating consolidated carried forward losses of $240,000,000 and massively diluting shareholder holdings along the journey.
From MEO's latest AR:
At balance date, the Group has estimated unused gross tax losses of $152.0 million (2013: $161.5 million) that are available to offset against future taxable profits subject to continuing to meet relevant statutory tests. To the extent that it does not offset a net deferred tax liability, a deferred tax asset has not been recognised in the accounts for these unused losses because it is not probable that future taxable profit will be available to use against such losses.


It is time to recoup this unrealized value and monetise it ASAP for shareholders, particularly as Management state that 'it is is not probable that future profit will be available to use against such losses'. Based upon the time value of money, the increasing delay in assessing these carried forward losses diminishes their value to shareholders. Indeed, if the business becomes unviable without the capacity to transfer these tax losses to a third party entity (via a TO that satisfies the Same Business Test) re: ATO) then this value will be lost to shareholders.

I don't doubt that there is an opportunity for material "value realization" in the TS asset. Value realized would be amplified if Heron & Blackwood (and all prospects) are included as well as the $152,000,000 of unused transferable tax losses. UBS is well positioned to package such a deal.
A TO offers shareholders the optimum opportunity to realize immediate material value and possibly salvage capital invested. Unfortunately, whilst MEO's strategy was previously an attractive pitch it has failed and if continued runs the real risk of further damaging/eliminating shareholder value (particularly with little obvious farm-out upside on the horizon).