Incredulous, page-23

Disclaimer: small, relatively recent shareholder (although I've been in and out of VLA previously) .... so more a commentary on the commercial aspect of the transaction than on the intrinsic worth of the company.

If the long term investors are right, and the company is really worth around $3/share, hasn't the Board / Lepu done the right thing?

1. As Whatsa says - raise capital and tie in a cornerstone investor with deep pockets to make it look like the company can go alone. This in turn:

2. Teases out a bid from a suitor. Yes, maybe the price was artificially forced down to make the bid premium seem high, but does this really matter when:

3. The auction has officially started and there is a clear timeframe for dropping the hammer. This means that:

4. Any other bidder needs to show their hand by a specified date.

Some may interpret the Directors "accept" recommendation as well as confirmation from Lepu that it will accept the offer as "selling out for a lowball price". However, if the aim is to tease out a superior offer, then you need to make sure that any other potential bidders believe that "the house is on the market" and will be sold at the drop of the hammer. I see the accept recommendation and the Lepu endorsement as doing just this.

If no superior offer is received prior to the Shareholder vote, then shareholders need to accept that the market price of their asset has been truly tested and assessed at $500m.

Of course the Board and Lepu have left themselves sufficient wriggle room to accept a higher offer should it be forthcoming.

Its hard for the Board to show a strong hand with a SP in the 60s, and it would be a brave Director that rejects $1.75 in this context. That said, with $1.75 locked in, its ability to negotiate a higher price, royalties etc .. is only enhanced.