The takeover speculation is due to previous discussions tabcorp...

The takeover speculation is due to previous discussions tabcorp (pre demerger) had with suitors about a year ago and offers were up around the $4B mark. The way I view this investment is it will either work out well and a takeover ensues or things go poorly from here and the SP falls. Though we are probably talking a couple of years, no doubt directors will want some nice options based off the current SP before considering a takeover proposal, so we will need a few earning seasons.

My gut feeling is that there is a similar likelihood for both events and the success might result in a SP of high $1s or failure in the 50c range. The point being on a risk reward basis this looks good to me, though if it fails I will take my fully franked dividends and use my capital loss to offset gains elsewhere. No investment is a certain thing and that is why we should have a diversified portfolio - this is just one of many holdings for me and I have plenty of other 'irons in the fire'. As the professionals say, if you can get 6 correct out of 10 you will do very well over the long term.

Note in the optimistic scenario, if TAH was valued at the same EV as previous takeovers the SP would be in the high $1s.