Not fair or reasonable, page-3

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asparagii

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26/01/17

00:22

Post #: 22147172
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Originally posted by wgly ↑

I am taking this view as a shareholder:

Based on the announcement today (Tropicana update), I find this takeover offer NOT fair or reasonable:

As at June 30, 2015, MAH had net cash of $53.7 million (or approximately 4.5 cents per share)
The exit out of Nigeria allows them to reclassify Foreign Currency Translation Reserve losses
(currently $6.4 million as at June 2016) to the Profit and Loss statement. I expect this will be higher but at this level, that is .005 (half a cent) per share
The accumulated losses as at June 30 2016 are $165 million. In last FY, CIMIC had a tax rate of 30.01%, which means these tax losses will reduce CIMIC's tax bill by $49.5 million or 4.1 cents per share

So the acquisition, just in these areas, will pay for 9.1 cents per share of the 14.5 cents per share offer. Without any other consideration, the premium CIMIC are paying is 5.4 cents per share or $64.8 million

The Tropicana project was signed in 2011 and was for 10 years worth approximately $900 million or $90 million per annum. An increase of 25% (todays annoucement) will add $22.5 million per annum in revenue. This contract is profitable so the increase in revenue should increase profit for every year it stays at these increased volumes.

Now I expect the MAH Board will engage a Corporate Advisory to assist in reviewing the bid. Grant Samuel was engaged by UGL and subsequently recommended to accept the bid. I will watch with interest who is engaged by MAH.

Lastly Vyril Vella should excuse himself as a Board member from the evaluation of this offer as he had a 34 year career with Leightons and on Linkedin states he is still with CIMIC as a consultant.

If you are a shareholder, I would be interested in your thoughts.

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Thanks for your write-up and analysis Wgly.

We'll have to wait and see how MAH Management respond to the offer - my guess is that they'll shoot it down. I think they will if they have integrity, at any rate.

Yes it is a low ball offer and I will not be accepting, regardless of how MAH Management respond.

Unfortunately though I'm down a lot in this stock and it does not look likely that I'll ever recover my $....

MAH Price at posting: 14.5¢ Sentiment: Hold Disclosure: Held
5 Upvote

0 Great analysis

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Last 29.0¢		Change 0.010(3.57%)		Mkt cap ! $624.9M

Open	High	Low	Value	Volume
28.0¢	29.0¢	28.0¢	$474.3K	1.666M

Buyers (Bids)

No.	Vol.	Price($)
13	186711	28.5¢

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Price($)	Vol.	No.
29.0¢	1235976	15

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No.	Vol.	Price($)
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12	496046	0.280
12	178290	0.275
17	187838	0.270
6	102646	0.265

Price($)	Vol.	No.
0.290	1236081	15
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