Hi William You raise several matters. I will respond on some,...

Hi William

You raise several matters. I will respond on some, but it’s best to maintain a clear focus on the events up to COB on Friday this week. After that it’s either a win (CA) to RG, in which case we can’t stop it, or a win to the holdouts, and we will have plenty of time to consider ideas for the months ahead. So far so good: no substantial sh notices lodged today or yesterday. Look out for any such notice tomorrow, Thursday or Friday before 930am (as I mentioned before that’s only triggered if RG goes over 87.85%. Also he must lodge a 3Y for any shares acquired up to COB tonight: last week he lodged the 3Y at 16.14 on Wed pm. My broker feed shows only ASX trades, not CBOE, but total ASX trades have been quite small in recent days. What we don’t know, until he lodges a 3Y or sub sh notice, is what rate of acceptances he is getting off market ( but it’s been a slow trickle in recent weeks).

The fate of this bid will almost certainly be decided by the actions of Manipur and the other top 10 holders, excluding Kin of course. Even if there is a flood of acceptances on or off market by smaller shareholders in the coming days, I doubt that that would be enough to swing it. In any case I think that’s unlikely- all holders are now alert to what is happening. They have received at least 14 communications from RG, and there has been only glacial change since February. I think it’s very unlikely that a large number will suddenly decide to accept, but anything is possible. In practice the question of RG getting to CA by Friday evening is probably up to Manipur and 3 or 4 other biggest holders (see later).

Q. Is it fair to say after 6 months, RGcan do the 3% creep off rule?” A. YES, but he can’t buy any PGH shares until then.

Q But I am afraid even if he tried to doso, there won't be sufficient volumes on the market to reach 1% extra and Imean by that time, he will be expected to pay $1.80/share or more to meet thethreshold due to insufficient volumes on the market. I think your logic isright that his best option would be best to enter the second bid with Manipurand associates soon. A. RG would have to be very carefulabout having discussions with Manipur etc after this bid closes. That is because,depending on the nature of such discussions, those other holders could be therebydeemed to be “associates” of RG under the Corps Act and that would cause him tobe deemed to have a “relevant interest” in their shares, which would be in breachof the Corps Act if it happened before 7 December. There is a lot of case lawon this point, and both sides would have to be very careful what they said. Theycertainly couldn’t enter into any binding or even option deal in thatperiod. That doesn’t prevent the minorities talking among themselves, as they have less than 13% in aggregate- so even if they were deemed to be “associated” with each other; it wouldn’t matter-- providing it didn’t involve RG. I don’t know whether Manipur etc are allowed to hint to RG what price level they would want to see if he was to be rebid in the future. That is a legally very tricky area.

I think I better going a long with theride, as even by delisting, if RG can't force me to sell at 84c/bid by thisweek I am happy to wait with you guys until he pays the remaining holders theright amount for him to have 100%. A.I agree. Once again,delisting is not the main point. CA is what matters. Until he reaches CA in this ora second bid RG can’t force you to sell, irrespective of PGH beinglisted or not. Providing you believe that PGH is worth more than84c and will be worth more than 84c in future, you may as well hold on. ClearlyRG thinks it’s worth more than 84c.

Q Because even though IBC lookshopeless to me, but in the letter, they kind of hesitate to put that proposal intoASX A. MY guess is that once the bid is concluded, RG will wantto change the Board, especially if RG triggers CA. Even if RG does not get 90%,I would expect him to appoint 1 or 2 new friendly directors to ensure that he controlsthe board. I believe he can legally use his votes to remove the 2 IBC directors, although he might decide that it looks better to have some “independent” directors if he is stuck at 87%. As long as RG controls the board, and hence senior management, he doesn’t need to remove the IBC.

Q That James guy said if Manipur winsthe case it will reduce Pact's profit. A.That commentappears to be correct. However, I understand it’s a max of $30m one-off paymentplus perhaps legal costs, which after tax would be about 7c per share. Notgreat for the other shareholders, but if people think that a “fair value” iswell over $1 it isn’t enough to sink the logic of staying. I also note that James refers at least twice to “Mr Geminder”, whereas everyone else does not use “Mister”. Either James is very polite or I suspect he may be an employee or friend of RG and is a mouthpiece to express pro- RG sentiment in this forum, without being seen to come from RG himself, which would require more care with legal formalities- given the takeover is still live and the legal case pending.

Overall, keep watchingpatiently. The small shareholders can’t change the result one way or other. Even if I bought $100K worth of shares I would have no influence. Even $1m would be only 0.3%. The only crucial matter now is whether RG can hit 90% by COB on Friday, and I believe only the top 10 shareholders can decide that. Thanks in part to your work, we know what Username and Manipur think. That leaves the rest of the top 10 including the nominee cos. I can’t remember the current holdings of the 5 nominees but I think in total they were less than 7m (2%). If they all suddenly accepted the bid this week(or sold to RG at 84c) that would be alarming but still might not be crucial. My guess is that the actual holders behind these nominees are waiting until the very last moment. I have no idea, but they might be hoping that Manipur, for example, will be worried about RG winning and that Manipur would at the last minute put a big buy order on the ASX at say 90c+ to pick up another 1 or 2 % to be certain that CA is blocked.

There are now 4 groups of players: RG with 87.5%. Manipur and Username withabout 8%., the 5 nominees and 1500+ smaller holders. It’s statistically unlikelythat a big part of the small shareholders will suddenly sell to RG on or offmarket. Some probably will, but not many. Thus we have a Mexican stand-off betweenthe 5 nominees and Manipur and Username, but mainly Manipur. My guess is thatsome or all of the holders behind the nominees are waiting until the very last minuteto see if M will be scared into putting a generous buy order on the ASX. The nominees can do one of three things: sell on market to RG for 84c, until COB Friday; hold for months hoping for a much better second bid; or thirdly wait till say 345pm on Friday to see if Manipur blinks first and bids say 90c on market so they can sell for a few more cents. Contrary to what I thought months ago, I now think that some or most of the nominee holders are arbitrageurs (or discretionary clients managed by arbs). We don’t know whether they are short term arbs hoping to squeeze a few more cents this week from Manipur (not RG, as he can’t increase now) or longer term arbs willing to wait for 9- 12 months to hope to double their money. A lot of this is guess work and the smaller shareholders can’t change the results either way.

I’m still watchingcarefully and may buy some at 84.5c in the next day or two. If RG doesn’t succeed now, and even there is a drop in the share price, I’m confident that it will rise within 12 months as I’m convinced that RG wants to have 100% not 87%, providing he doesn’t have to pay a crazy price to get it. But to get 100%, rather than be stuck with say 93% by using creep, he will have to make a second bid, which will have to be generous enough to get at least Manipur and a couple of other big holders over the line.

None of this is advice. DYOR