propaganda

Did everybody else recieved the propaganda letter from Minor the other day ? Is it just me that feels annoyed that Johnny Come Lately feels the need to talk to long term shareholder like they are idiots ?


They tell us that their offer isn't opportunistic. They tell us that because two directors agreed to sell Minor some of their shares at the offer price the offer must therefore be fair. Interesting that they don't bother to mention which directors they are referring to but they must assume that we are all stupid or unable to read.

We all know that both of the directors referred in this comment appear to be in financial difficulty with one having recievers appointed to his personal investment company and according to reports the vast majority of his holding is being sold from under him by the receivers. The second director referred to by Minor failed to pay up for a large chunk of the placement in Oaks that he negotiated to take up and according to recent announcements is refusing to respond to Oaks management in regards to other financial commitments in relation to Dubai despite supposedly being a director. Hardly the most credible two people to have done a deal with Minor ! Just people two holders appear to be in significant financial situations and might be desparate to cash in their shares at whatever cost isn't in any way indicative of the situation for the rest of us.

Minor also take issue with the board's comparison of the valuations of Oaks vs other public companies. they quote 4 of the comparisons that they don't think are fair. Even if you remove these four that they object to there are 7 others with an average multiple of 16.32 compared to 4.8 for Oaks. I also note that the average multiple before removing the comparisons that they object to is 16.51 so removing them only changes the basis of the comparison by a tiny 0.19 thus making their point rather pointless. They didn't even bother to provide alternative comparisons which I assume is because providing any genuine alternatives would not have supported their case and its much easier to cast doubt on what somebody else is saying than to provide any useful facts of your own.

Minor likes to use colourful words and has headed a section of their letter "Oaks' Precarious Financial Situation". They then start to waffle on about current assets vs current liabilities. We all know that letting rights aren't valued by banks in the same way that bricks and morter are and this is the basis of the banks wanting us to reduce our gearing. Its interesting that they focus on asset valuations and not debt servicability as is the case with almost all companies. With our rapidly growing earnings and interest coverage is actually quite healthy and with debt rapidly reducing this should genuinely be a non-issue.

The banks asked Oaks to raise another $7m which was supposed to largely be done in the placement previously negotiated but fell through (see above reference to a director). Minor knows this and therefore knows how much money still needs to be raised. Despite it being written in about a dozen market announcements Minor bring it up as if there is something undisclosed.

They also tell us that they offered to take a placement and Oaks management rejected the idea. Notice that Minor never once tells us the price per share that they offered to take a placement at or any other conditions that were attached. I could approach the board today and offer to take a placement at 10c per share and I think all shareholders would agree that the board should tell me to take a hike. Minor, its meaningless to say you made an offer without telling us the details of the offer.

Minor knows their bid is woefully inadequate and deparately wants people to accept their low ball offer before the receiver announces the purchaser (and purchase price) and the large stake that they are holding. As this news is due very shortly one can only assume this letter is an attempt to scare shareholders into accepting their offer and drag down the share price this week.

Like all of us Minor must be fully aware that the share price and control of Oaks is to a large extend at the mercy of the announcement by the recievers and the intent of the purchaser(s). We know that Minor thinks dirt cheap is enough and are unlikely to be in the running to get this stock unless they pull up their socks and make a substancially higher bid so why are they so desparate to get in a few more acceptances now ?

I'd say that they know they aren't going to win nor will they get control. I believe they might be expecting a much higher takeover offer from another party and want as much stock under their control as possible to profit from any increased offer.

Good luck Jonny, your aren't getting my stock.