ponderings, page-9

The RMS share price weakness is coming as a result of the takeover. Almost always happens in a scrip bid as people sell the Bidder and buy the target.

The abitrage is reducing from the past as DIO is trading at 80.5c (or equivalent to 40.25c for RMS) and RMS is trading at 47c.

Let's face it. AVO are clearly in the driving seat for DIO with 45%. The best outcome is for RMS to get over 10% of DIO say they can block any compulsory acquisition of DIO by AVO on any future bid.

Given the RMS bid for DIO is effectively unconditional, for the time being, anyone buying DIO can effectively be buying a share in RMS (at a discount to the current RMS price).

If RMS shareholders want to maximise the value of this play to RMS, they should consider selling their shares in RMS, then buying shares in DIO and accepting the RMS bid, thereby getting their RMS shares back again. There would be a number of people able to lock in a capital loss on RMS and set a lower cost base for their RMS shares going forward. People won't need to worry about not getting the tax deferral on the sale of DIO shares as they will have generated a capital loss already which can be offset.

If too many RMS shareholders do the above they would be likely to push the RMS price too low, but it shouldn't end up at a loss.

Therefore any RMS holder should serious consider selling RMS and buying DIO and deal RMS into the picture for the future final battle for DIO.

Cheers
Marvin