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Hi guys

Interesting, I think I can see where they are coming from...

Benefits (as I see them):

1. Shares on issue reduce so there is a much greater chance of some real price movement(s) rather than just SP volitility. Which is what I think we're seeing/what we've got now.

2. EPS and other ratios improve as you have the same profit over less shares - when you're running at a profit of course.

3. I remember Kerry Packer saying that a higher priced stock attracted a different type of buyer. Not quite sure what he meant by that, but it was 1 of the reasons he promoted the Challenger SP consolidation in '94 (from memory). Packer owned approx 20% of Challenger when it went for a 1 in 5 consolidation.


Costs:

1. the cost of the process, including an EGM.

2. Post consolidation there is no guarantee that the post consolidation SP will be >= the consolidation ratio X pre-consolidation price.


cheers
Lekki