Ann: Full Year Statutory Accounts , page-4

It is not entirely clear why the HAL/HTI tie up was aborted. In all likelihood, HAL realised it was no better securing capital via backdoor compared to the normal IPO route. It is possible HAL have found an alternate, and simpler way of funding their acquisition. The sale agreement is not set in stone. I’ve never understood why HAL wanted RNC shareholders along for the ride anyway.

It does seem very strange to me that there has not been an announcement confirming the deal is off. REX and/or HAL would have known weeks ago, with certainty, if they were unable to complete the acquisitions. If bank debt is involved with REX, the banks would have confirmed their limits and terms months ago. Why the delay?

RNC is already priced for the deal not to go through. It will be interesting to see trading on the day the sale is officially called off.

There is no doubt RNC is a substantially different investment than it was at this time last year when the share price was 6c – with the debt write down and now the $4m capital raising at 40c. Even the price implied by the takeover offer should be enough to keep a reasonable bid under the share price. The deal may fall over now, but REX/HAL are not going anywhere. The longer they take to secure Run’s assets the more they will have to pay in the future.

Then there is the potential for a dividend. The best way for insiders to earn a realisable return on their “investment” is to start paying dividends. Run is forecast to pay c.$1.7m less in interest in FY13 - if RNC can muster up $1.3m in dividends pa, it would equate to 1c/share (diluted). At 15c, that would equate to a 6.6% dividend yield.

I am more than prepared to sit on an investment I believe is trading at 50% of liquidation value if I am being paid well for the privilege.