http://au.news.yahoo.com/latest/a/-/latest/13161269/analysts-expe...

http://au.news.yahoo.com/latest/a/-/latest/13161269/analysts-expect-gunns-slump/


Financial analysts are expecting a negative sharemarket response to Tasmanian timber company Gunns' new capital raising plans.

It's preparing a plan to issue new shares to existing shareholders.

The company says it is also in negotiations with investment banks and a new institutional investor.

The move comes after the Richard Chandler Corporation scrapped its $150 million bid to take 40 per cent in Gunns.

Michael McCarthy of CMC Markets says Gunns shares are in a trading halt until Monday.

"Although the company says it's confident it'll be able to raise the $280 million required to go ahead with its pulp mill project the market is clearly expressing doubts and with Gunns valued at only $135 million when it last traded there's concerns this equity raising may not be done."

RBS Morgans' adviser Will Richardson expects Gunns shares to fall below their pre-halt value of 16 cents.

"When the share price re-lists on Monday the price will be significantly below that level," he said.

The business commentator and Gunns shareholder Stephen Mayne agrees.

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I have been considering jumping back in if the SP dropped enough. "Buy in gloom" etc

It will be interesting to see what plan Gunns come up with, and for those wishing to buy/accumulate, what SP the market reacts to. I guess it will also depend on what initial drop the market extends too and whether or not it hits the 'funds' electronic panic button/stop gap.