shady trading, page-5

The upside does look very attractive, especially if you believe both parties are incredibly keen to get a deal done. I truly believe both parties will work around any issues with the conditions.

I've been trying to get my head around the downside from these levels. The sale agreement pricing is a great endorsement of RNC's underlying asset value, unfortunately those assets are held in a listed entity with issues.

I believe the market put a serious discount on RNC due to lack of liquidity and concern over management, who have steadily increased their ownership of the company through egregious remuneration policies. The onerous debt balance before the write off didn't help matters.

If the deal falls through shareholders are stuck with management and an illiquid stock. The upside is that a 3rd party has confirmed the underlying value of the assets and the value of those assets should continue to grow in attractiveness. The Run Corp brand and foot print is actually worth a bit as well. As the company pays down debt, smaller private equity groups will become very interested. Downside is well above 6c IMO.

RNC mgmt/board have the share register locked up, thus they have the greatest motivation to see a deal go through. As such the most onerous condition is the suitable tax treatment of the sale and disbursement of proceeds. After all, it would be poor form to steal from shareholders only to have the ATO steal from them.