An interesting point has been raised on this thread.
Centro told us last week that proposals have been received at the group level which are being considered. This is in keeping with their 3-prong plan which was announced right after the woes begun.
If an investor is considering an equity injection, one could assume they are comfortable with the long term prospects of the company. In previous posts, I have suggested that any injection would need to be sizeable, in the realms of $1bn+ to make any sense to both the company and the investor.
Now the SP has fallen, and MAY continue to do so, a potential investor would be able to purchase the entire entity for significantly less than $1bn. At the current SP, Centro is worth about $340m. With a 100% premium and expenses, we are still talking less than $0.75bn.
I doubt we are going to see anything on this front for a while but you can bet that anyone who has approached the company to invest at the group level will be running the numbers on this in the coming weeks.
Why bother injecting equity and sharing it with existing holders when you can take out the whole company for less?
The potential for litigation will cause some angst for suitors. There was a question at the 1/2 year presentation about how to ring-fence any equity injection against this and I guess it will be a key consideration if a transaction was to be proposed.
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
