Ann: Skilled Group to be acquired by Programmed, page-27

Froof,

When you ask "how do existing SKE shareholders sell Programmed shares that haven't been issued yet?" I assume your question has arisen from my assertion that "...any SKE holders, who have decided they don’t want to hold PRG shares, would have commenced selling now already".

I'm afraid you've misinterpreted what I said. I meant that SKE holders who have decided that they don't want to hold PRG, would have commenced selling their SKE shares already, and not their PRG shares. (I took it as assumed knowledge that PRG shares are not yet for selling by SKE shareholders)

Remember that - within a small variance (of the order of magnitude of one or two cents, maybe) to reflect some small residual risk that the deal doesn't go ahead, for whatever reason - SKE's shares will, from now on and until the merger finalisation date, trade in close tandem with the PRG share price, and specifically via the relationship:

SKE = [(PRG - $0.115) x 0.55] + $0.25

So it is quite academic whether one sells one's SKE shares today or whether one waits for one's SKE shares to be converted into PRG shares and then sells those PRG shares. There is really no difference.


As for a source of information for this sort of transaction, to the best of my knowledge there is no service provider (absent broking analysts, perhaps, but I place very little trust in what they say [*]) that will do the work for you; unfortunately it has to be done on a first-principles basis.

So I'm afraid there is little else for it but to closely study the various announcements made by the two companies in order to understand the mechanism of the deal, preferably with the aid of an excel spreadsheet to conduct scenario analysis.


[*] As case in point, I note that one or two analysts still see $1.79 as the fair value price, having failed to account for PRG's upcoming 11.5c dividend strip.