Ok, I've crunched some numbers (please correct me if I am wrong in this), for the in-specie distribution, had it occurred, for holders of CGP. It would have stuffed everything up, for new CGP holders of IMU, and for IMU itself. Please note I am a happy holder of both CGP and IMU. So, here's why current management probably did the right thing:
The in-specie promise from former management was said to be 1 in 10. There are 331,252,461 CGP shares. They mostly would have gone to this mob:
National Nominees Limited 24/09/2012 96,600,000 9.52 ____________
Small retail holders, with say, $10,000 holding, or 312,500 shares @ 3.2c, would have received 31,250 IMU shares, or $218.75 worth of IMU- an unmarketable parcel. IMU would have to double in share price to make the parcel marketable- this could happen, but what about in the meantime? IMU would have had a zillion new shareholders with unmarketable parcels, and would have had to waste money to do an unmarketable parcel buy-back, or sit with a very unmanageable registry.
Now CGP is left with more cash, and IMU will have some new - probably buy and hold- large shareholders. I would say CGP had to sell, rather than give them out in-specie. Thoughts on this, please?
CGP Price at posting:
3.4¢ Sentiment: None Disclosure: Held
