Tapdancer>Instead of looking at valuations based on relative...

Tapdancer

>Instead of looking at valuations based on relative market pricing ("Mr. Market") how about doing some proper valuations? Do some very rough projections as to when you think the company could be in a position to pay distributions on the hybrids (whether they get there through a slow grind or raise further equity regardless of dilution of the ords) then you'll find that the discounted NPV is still a multiple of the current offer.

I agree we should not be looking at valuations based on current market prices.

We need to estimate what the price of PPX will be in a few years time assuming they are turning the corner, which looks as if it is the case, to see if the 250:1 is a good deal. If the deal is successful then the PPX SP should rise at least after those PXUPA holders, who swap and sell PPX, get out.

On the other hand with PPX success those PXUPA holders who hold out should also be rewarded down the track with an ultimate return of divs and a roughly $100 SP but that may take quite a few years. The risk is that PPX gets over 75% of PXUPAs and is able to change the terms and possibly screw holdout PXUPA holders.

There is also the possibility of long drawn out legal action which could change some of the rules and possibly tilt the game in favor of PXUPAs.

And there is the question of Coastal. What game are they up to? Do they see PPX as a turnaround and see PXUPAs as a cheap way of buying in? If so that might explain why the Board made this offer. It would certainly make it more successful.