AMA reorganization, page-27

It's a good question, so far unanswered. My belief is that they have no willingness to do so. Here's some lateral thinking on that.

It is clear with hindsight why AMA made such a concerted effort to acquire the 4WD business last year. At the time it made no sense to me why they should pursue a minnow so aggressively. 4WD was practically irrelevant to the overall AMA structure and peripheral to AMA's core business, so why do it, except perhaps to add some diversity to the mix.

Well, as it turns out, a demerged AMA which gives birth to a new ACAD company running the parts supply for smash would obviously find a great fit with something like 4WD incorporated under its umbrella. The 4WD bid, which was concluded in January 2018, commenced as far back as May 2017. It was run by Bell Potter, the same people who are advising AMA about the Blackstone bid.

If you think the way I do, you would conclude that the AMA directors have been thinking along demerger or restructuring lines for a long time. If so, they would be highly unlikely to do an about face and go back to the bread and butter business of running AMA.

Referring again to the STO takeover bid, the directors said there would be better long term value for shareholders by continuing to run STO's existing operations. This would lead to the reintroduction of dividends after a period in which payments were suspended. With AMA, the reverse is happening. Shareholders are about to receive a paltry half cent interim dividend which will probably turn out to be all there is for the entire annual operations of 2017-18, as no final dividend is contemplated in the proposed demerger.

The STO directors' decision to reject their takeover bid caused a 10% drop in the STO share price, in one day. The AMA directors' announcement of the the Blackstone bid and their decision to accept it appears to have cemented a 20% decline in AMA's share price from its highs of January 2018.

Without knowing what is really motivating the apparent desire to sell the most profitable part of AMA cheap to venture capitalists, I am at a loss to speculate further. It does appear that the deal has been a long time in preparation, which suggests that the directors are unlikely to want to return to the old business model.