I've been thinking about how this might play out. LLC needs two...

I've been thinking about how this might play out. LLC needs two votes to pass -
1. 75% of the non-LLC shareholderrs to support (by voting rights)
2. 50% of those that vote (by number) to support.

I suspect that LLC will have canvassed the big institutional holders and worked out that 35c will be enough to get the big guys to roll over, thereby getting no.1 over the line. Its no.2 that they will be worried about - us little guys who feel we are being ripped off by a mega-corporate trying to buy us out on the cheap. We are harder to sway, and I still believe there are plenty of us who won't change our "no" vote.

However, we little guys are at a disadvantage. LLC know how the count is tracking - we don't. They know how many little votes need to be turned or removed. I say "removed" because if LLC (or a friendly mate) were to step into the market and take out the 34.5 offer, thats 33 potential votes removed given they will no longer be able to vote once their share arer sold. Then there another 25 votes at 35c. If its close, they might do that. Only they know if its close, which is rather unfair.

If the bid gets knocked back (ie we little guys win), I don't expect the rights issue to be deeply discounted. Having failed to buy the whole company on the cheap, LLC will look to increase their stake on the cheap. The most effective way to do that is to underwrite a rights issue and collect all the shortfall, because buying that way gives them all sorts of exemptions from the takeovers rules. The only way to ensure a decent shortfall is to price the issue at, or close to, market price - an issue priced somewhere between the initial bid of 31c and the final bid of 35c. Based on their recent actions, I think the LLP "independent" directors are close enough to LLC to ensure an offering that helps LLC increase their stake. This also means their threats of heavy dilution are rubbish - for heavy dilution to occur, the issue needs to be deeply discounted and unfairly discriminate against existing non-LLC shareholders. I think the odour about this whole saga is such that ASIC, the ASX and the Takeovers Panel would take a very dim view if LLC tried to discriminate against the non-LLC shareholders in any future LLP equity raising.

They are my thoughts - I think it will be a close run thing. I definitely will be retaining a no vote and buying more shares in the subsequent rights issue if thats what happens.