Yes, 1urker, I agree. It has been my experience, however, that the directors of a company will want to justify the t/o to its shareholders by upping the divvy from their new possession. If ownership does not reach a high enough level, you are absolutely correct: even CIMIC appointed directors would need to be prudent and keep the cash reserve in UGL.
While UGL may not be the cash cow its was, CIMIC have correctly identified that the bottom of the economic cycle has passed, so business should be on the rise. That, together with any "synergies" extracted (read: sacking of senior and middle management, replacement/unification of business systems, closure of offices, etc) will enable an increased drawdown of cash, cash that an independent UGL would have needed in reserve, but a subsidiary does not. Well, that's my hope. This all assumes that the final game is 100% ownership, which, of course, it may not be.
The last change in substantial holding statement from UGL (2/12/16) shows CIMIC now owns 61.3% of UGL. I would have expected an extension of the offer once they had breached 50%, but none was forthcoming. Next few days will clarify their final holding.
UGL Price at posting:
$3.16 Sentiment: Hold Disclosure: Held
