Hi Madas, yes Maui's cost is 67.5 cents and yes at 70cents that...

Hi Madas, yes Maui's cost is 67.5 cents and yes at 70cents that now makes their task more difficult.
1. The gap between 70 cent and the now expected $1.23 will have to be filled to probably up to about 80 cents before an effective offer could be launched.
Any Bidder will be aware of previous attempts and also the current VWAP which I think sits in the mid 80cent range (which is the SP the bidder will look at)
So from this level (80cents) a realistic bid could take place and be justified to both sides of the deal.

2. The Bidder will use P/BV (currently at about 0.83%) & EV/EBIT (probably using 7x which is a cheap purchase multiple) to decide what NFK as a whole is worth to them as opposed to the SP which is driven by market sentiment as opposed to real value. So yes the current SP will be a factor (distraction) but that really is only a side show to the 70% holding by the major shareholders and this is something both sides of the deal understand very well.

3. So filling the gap between 70cent and 80cents will come down to new investors spotting what I have outlined and also some of the majors topping up at the right price at the right time. (This has been happening for a few weeks now and is in their best interest to add to their holdings)
I expect this consistent trend to continue over the next few weeks. Also madas you should consider the overselling of NFK stock on its last market update and normally a stock returns back toward its current intrinsic value, which in NFK's case is a lot higher (even RBS has $1.07 on NFK)
Any positive announcements such as a contract win will also play a strong part in filling this gap.

4. Norfolk is due to report on the 22nd November, but I would not be surprised to see an earlier this year (which would be a positive)

5. Maui are not going to hang on to their holding in NFK, and this was further evidenced in there recent outlook which no longer referred to Norfolk as a holding in their Fund. (Very Interesting bit of info to take on board).
Funds like Maui do not muck around, they will be working VERY hard to put a deal together - sooner than later! Funds like Maui do not normally take partial positions in publicly listed companies and Maui will be uncomfortable in just sitting there. Obviously madas I cannot say with any certainty that Maui will actually succeed in achieving $1.23 but I can say that the numbers I have put together above could easily justify a $1.41 bid so $1.23 is a further discount/comfort to the Bidder. As I mentioned in a previous post Maui are VERY confident in achieving their price (I think their carrying value over the 3 years currently sits at $1.01 in the fund) This Maui team are realists and not given to over optimistic plays, they are conservative in their management and expectations.

Madas I said in my last posts, I try hard to just stick to the facts and let them do the talking, but here in this reply I have obviously blended this with my own view & opinion.