Graham>There is a prisoner’s dilemma at play. The share price of...

Graham

>There is a prisoner’s dilemma at play. The share price of PPX will never materially improve with the hybrids in place. To think otherwise is fanciful.

I believe that to be false. The share price will begin to improve if and when it is evident the company is profitable (or soon will be) and that its net earnings will then continue to improve. The hybrids are a long term liability but do not necessarily prevent the above to occur. Markets tend to anticipate change.

>"Today, I see three possibilities:

(1) The turnaround is on track and the Board wants to be rid of the hybrids ASAP, for their own opportunistic reasons;

(2) The turnaround is on track and a third party makes a “whole of company” play for their own opportunistic reasons; or

(3) The turnaround is failing; in which case the risk to PPX is always greater than PXUPA."

There is a 4th possibility

(4) The turnaround is on track and the Board realises it cannot do a deal to be rid of the hybrids on terms it considers reasonable so it solders on gradually increasing profitability and SP. If it has sufficient spare cash, from time to time it buys PXUPAs on market if the price is attractive thus reducing its long term liability.

Option 2 is always on the cards and the issue then becomes can the bidder offer a price that meets the expectations of both PPX and PXUPA holders.

There is also a 5th option that I have floated - a simultaneous CR and PXUPA shareswap/partial buyback negotiated when the SP has sufficiently recovered to make underwriting viable.

>Some folk here seem overly concerned about motives.

I'm not concerned about possible motives other than their impacts on other shareholder interests. There is nothing wrong about being opportunistic when it comes to shares as long as insider trading is not involved.