I guess the definition of a profit means different things to different people, and your investment strategy. As a share investor one's profit comes buying a share and waiting for someone to buy that share at a higher price, the sooner the better. As a long term operational investor your profit comes from the increased value of the asset over the the long term, generated in part by efficient operation of that asset. This is the proven and well documented strategy employed by the "Oracle". So on a simplistic basis yes Minor have bought into Oaks to make a profit. However, I don't believe that they bought into Oaks to make a traders profit rather a long term gain from the increased value of the asset, by management etc. Given the management time and costs incurred to date, I don't believe that Minor will give $.60 a second thought.You need to understand that Minor is also a public company and as such has shareholders watching management as well. In the case of RFG the shareholders expressed their dissatisfaction of their ill thought out take over by deserting the share register and as such the share price has not recovered. Likewise with Minor the shareholders may not be too impressed with the Directors risking large amounts of the companies funds on what turns out to be a share play.
As regards the latest episode in "the Days of our Oaks", there are a number of things to consider. Firstly, the offer is being made by the executive himself not the holding company, if by some chance he is successful, so does he intend to make a trading profit by selling it to the holding company at a later date? I guess the saving grace on this offer is that it has been made by someone who at least knows how to run a hotel! Secondly, as far as the Oaks share price is concerned, why would you pay over $.52 given that the offer is conditional on a number of factors, such a DD, and FIRB as well as the takeover panel overturning the Minor offer given that ASIC has endorsed the sale. I cannot see any reason that they would overturn the takeover given the open nature of the Minor deal, so the best you can hope for in the short term is $.52. Maybe it is a case of trying to over bid the highest bidder at an auction.
OAK Price at posting:
52.5¢ Sentiment: Hold Disclosure: Not Held
