@arsenic, what are your thoughts on the consolidation 4:1 done in Nov 2014? - now that over 2 years have gone by. The reason given at the time was simply so as to put it line with peers. There were 1.66b shares on issue pre-consol'n with the SP being about 18.5c = MC of $307m.
If the 414m new shares happened to be the number of shares on issue for MLX now (which is not the case as 609m on issue atm) then the MC = $368m, being 414m x 89c. A fair increase by itself, but we have to add WGX. On a 1 for 2 issue basis I therefore need to apply 212m and multiply by $2.44 = $517m and add that to the $307m = $885m.
$885m - $307m = $578m gain.
Of course, more shares have issued in MLX since the consolidation so that the number is now 609m. I have not included those shares in this exercise.
Did the consolidation aid much in the big MC increase? Just pre-demerger, the SP of MLX was $1.59 - multiply by 414m (say) = $658m. $658m - $307m = $351m gain over a 25-month period. Of course MLX was pregnant with WGX, so that WGX having been born, the MC for both then increased by quite a bit, albeit slowly at first.
It appears to me that both strategies - consolidation an demerger - contributed greatly to the increase in shareholder wealth.
Thoughts? arsenic and others
(20min delay)