It is heartening to note the staunch stand the board of CCI (which is only a small company) has made to the bid from a much larger company (CPB). Mind you, the board has a combined interest of 32% of CCI so they have a strong vested interest in maximizing their own investment as well as that of the rest of the shareholders.
Assuming CCI does make a forecast in the region of 4cps for 06/07 earnings, this will push the price undoubtedly into the 40c+ region, and over coming months would see it edge up towards 60c as we get into the late stages of the 06/07 FY. I think CPB will be now looking at the shareholding they would require, along with other shareholder support to gain a seat on the board. I can see them engaging in a shareholder phone campaign leading up to the November AGM, where I would imagine they will nominate someone for election to the board. I think CPB are very conservative and will not bid too much higher until they can understand the intracasies of the business in more detail. The only way they will be able to do this is to get a spot on the board.
It was notable in CCI's reply to the 35c bid from CPB that no reference was made to CPB's intention to push for board representation. Perhaps some division exists between the CCI board members with regard to CPB gaining board representation?
regards,
Cheeerful
CHL Price at posting:
0.0¢ Sentiment: None Disclosure: Held
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