the bnb mge fee is it really a poison pill

The BNB Mge Fee is it really a poison pill. That is how the Australian describes it today. The annual report has it $22M for 2007. $22M seems fair to me me on Rev of $1.2B. But the lock in for 25 years (see the article) is admittedly a bit over the top.





The Australian 20/8/2008

BBP and other listed Babcock satellites (BBI) are locked into exclusive management and asset management agreements which run for and extraordinarily long 25 years.

Moreover these agreements cannot be terminated for poor performance.

The RE can be removed by unit holders, but that is no remedy as the management agreements continue on.

They also continue if there is a change of control of BBP so whatever happens Babcock is guaranteed to continue to receive fees for the full quarter of a century.

The only place that was clearly spelt out was in the BBP prospectus was in the questions and answers section.

(the article then discusses how this is a disincentive for take over parties and describes the agreement as an "extremely virilent form of poison pill)

The management fee is based on BBP's gross assets so Babcock actually benefits from bloated debt levels because it collects fees from the debt.