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Tarvold

22,666 Posts.

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19/08/24

11:13

Post #: 75265986
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Originally posted by jake0002: ↑

No, not correct.
The Cap raise is $15m.
The acquisition cost is a maximum of $6.5m.
Of that $6.5m, $5m is in scrip!
$1.5m is an earn-out payment ie so it may not even be paid.

So on my maths, no cash is being paid!? Happy to be corrected.

So the balance of the $15m cap raise is "...to fund Auswide’s immediate regulatory CET1 capital requirements, ....."

Now I admit I have not researched the CET1 captial requirements.
It could be related to the extra capital required to held against the receivables which will be acquired from the Selfco acquisition?? I don't know.
But what concerned me is that it may relate to ABA's requirement for Tier1 capital to support its current book?

The release today does not look to me like ABA is on its death bed.
On a brief read of the materials, I think ABA is still alive and well.

Prime-facie it looks like the merger might be a sensible move - but not happy with pricing.

Remember, they call it a "merger of equals" - but we ABA shareholders are losing our ABA shares and being offered different shares ie in a merged entity controlled by MYS and its shareholders. We are in the minority - so it is in reality a takeover.

AND in a takeover, the target is usually provided with a 40% Premium to the market price of its shares. Maybe more, maybe less. This clearly is not happening. At least the breakfee is only $2m - so it may attract another predator?

So I am not comfortable that the merger ratios (ie consideration) reflects what we are being told.

The SPP is a sop to existing shareholders, to keep us happy when the voting comes around.

This is a Scheme of Arrangement, so for once, retail shareholder vote actually counts for something!

As an aside - are the shares issued under SPP eligible for the ABA dividend? I have not read all docs.

Anyway - all just IMHO.

Cheers to all ABA shareholders - we can wait for the Independent Expert Report. More paperwork.

Expand

If you read further you'll see that
a) ABA currently has excess capital
b) the CETI requirements relate to the acquisition
c) the cash raised is also being used to fund the acquisition operations

If there wasn't an acquisition there wouldn't be CRs.

When you have two companies merging that are significantly different sizes there will always be a senior & junior partner.

Last edited by Tarvold: 19/08/24

ABA Price at posting: $4.35 Sentiment: Buy Disclosure: Held
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Last $4.13		Change 0.030(0.73%)		Mkt cap ! $212.9M

Open	High	Low	Value	Volume
$4.12	$4.15	$4.05	$97.52K	23.71K

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