PRG-SKE Combined-Co: Some Pro Forma Numbers, page-9

I don’t particularly want cash for a SKE takeover at the moment – anything that would be offered at this point in time would under whelm the long term value of particularly the skilled workforce and tech/prof divisions.

But as SKE keep buying crap with borrowed money at the wrong times and weakening the business as the business environment tightens I would accept a script offer at the moment from PRG. Personally 3 PRG for 5 SKE would get me over the line. But I wonder why PRG (on behalf of their shareholders) would want to go beyond 1 for 2 and not get equal exposure to synergies and operational leverage from SKE business when business environment improves, hence merger of equals and cash. Doubt we will see much more than the original 25c maybe the smallest of sweetener. Wouldn’t really want to see much more added to the new financial structure anyway.

Both have solid business assets that are logical to combine – the stability of PRG’s facilities management business is a good foil for the other businesses. PRG has the upper hand, SKE should have been in the box seat to control the combination except they can’t resist buying junk at the top and undermining the balance sheet.