"It makes sense that RBS know that the vote is going to fail - or else why leak out 'what might occur'."
the leak is to use media to garner support for their cause so it is still swinging atm.
"BAM have only themselves to blame if this deal fails - they could have bought the BEPPA that has been crossed with a better offer."
I don't agree with that, I think it is a poor communication of the facts that leads to that conclusion. I see this as full value going to Beppas eventually as the shortfall of asset fund distributions is absorbed by the banks and not Beppas. It may not be immediate, most likely a few years minimum, or when the banks are happy with the return. There are questions still of how much will flow to Beppas seeing as they are receiving ~37+6 soon and should really only get their face +6 and no more. This has not been publicised as it may be a thorn at the moment.
"Apart from RBS who would be the winners from a 'no' vote? I would think that BBI ords would do worse."
RBS will ensure their own Beppas are paid something for so long as they own them so a watch on the registry for movement is essential, other Beppas would appear to be okay under this arrangement so long as RBS hold plenty of Beppas and there are ways RBS can maximise this by buying more on market.
When RBS do a equity raise to cover the equity injection, it would have to be along the same final value of the 8.7x that the BAM offer is based on, otherwise who is going to participate?
From that it appears that BBI's will be better off short term by the lack of immediate Beppa dilution, but worse off long term by the double spiral dilution, so you can bet bottom dollar, any equity that enters now will jump asap so RBS can take the interest through the hybrids before the market wakes to the double spiral price and no dividends. This is where the two deals really vary a lot, BAM will aim for dividends shared equally whereas RBS want the lot through their hybrids.
Once again it appears that jumping out of Beppas is unwarranted, although staying in BBI is less worse short term.
ifandwhen
BBI Price at posting:
3.5¢ Sentiment: Hold Disclosure: Held
