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Um why is there any talk of a hostile takeover? The directors...

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Nauv

386 Posts.

31

08/02/18

13:49

Post #: 30917134
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Originally posted by Pizzas4 ↑

Hey Nauv

Of course you are correct where the directors field an attractive offer that is in the best interests of shareholders.

However the recent experience with Santos knocking back a better than six dollar takeover attempt demonstrate the latitude directors have.

With all due respect, in the event of a hostile takeover attempt to secure the assets of SYT by a third party (which I have stated is my primary concern at these low prices not that I would welcome a takeover which would be diabolical at these prices) the directors would suggest that the price was not in the best interest of shareholders.

If pushed by third parties they resign. They do not have to sell their shares. Therefore a significant stake in the hands of aligned parties does act as a block to a hostile takeover where a special resolution is required to make changes not agreed to be directors.

The duty to act in the best interest of shareholders is a judgement call. They would certainly not be interested in selling at anywhere near these prices I would expect and my comments are that it is unlikely any hostile takeover could occur.

To control the company to take the company private and wrest the intellectual property away from current shareholders for example, in these circumstances a company would need to vote over 75% of the voting stock of the company by way of an extradorinary special meeting.

The point I am trying to make is that at these prices the cost to acquire the intellectual property might be cheaper for "partners" by acquiring the company than entering to a revenue sharing agreeement. In this case the blockin stake is very relevant.

My point was and still is that there are significant consequences of a low share price, not just the loss of shareholder capital and at this market cap the cost to acquire the company would be very attractive to those deep pockets who may be paying significant revenue to the company in the near future.

Directors do not have an option in these circumstances to approve or otherwise any attempt to takeover the company by third parties.

Therefore I still say thank god for the blocking stake because if any talk of take over is not absolutely in shareholders best interest then it will not get up even for a telco with deep pockets.

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Um why is there any talk of a hostile takeover?

The directors are actively involved in the business and carry a significant amount of goodwill. This isn’t anything like other bigger companies where the board of directors are far removed from the day to day work of the business.

Put another way, what do you think happens to syntonic if GG and RA were to succumb in a plane crash tomorrow?

TL;DR - Blocking stake or not, a hostile takeover won’t happen.

SYT Price at posting: 1.4¢ Sentiment: Buy Disclosure: Held
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