Hi russ. Dilution or Interest payments coming out of profits which is worse. They paid 30c per share. More than 100% on todays retail share price.. Imagine the dilution if the deal was done at the retail level...
I imagine the financiers are getting a pretty good deal. Under the old arrangement they would have received Interest payments of perhaps 7% of $52Mil and decreasing over the life of the loans due to capitol repayments or alternatively in the new arrangement they could receive royalties from a company over the life time of that company... With the revenue looking to turn considerable profits and by the looks quite rapidly it would have been in the best interests of the share holders to not do the deal but then the marriage of their money and the increased productivity and expansions , it might just pay off for the shares holders in the longer term... Don't know only time will tell.
I would have though a bit more share traffic would have gone through on the fundamentals here and today there were 6 Xd trades. So perhaps we might see some action yet....
CNH Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
