Effectively, it would seem that when the Bullabulling allocation takes place, GGG shareholders will "most likely" receive value equivalent to 55% of the company, and AZX shareholders will receive 45% of the company.
This is because the other AZX 5%, which is GGG stock that AZX own, has been hived off to AEL (Auzex Exploration), the demerged entity that will probably list on the ASX next year.
So, after selling 50% of Bullabulling to GGG in 2010, another 5% was effectively sold in order to get this merger across the line. What responsible management on the planet would sell out 55% of an asset like Bullabulling?
It will be interesting to compare the value of one's shareholding in AZX on the day of delisting, and the subsequent value of one's shareholding in BBG on the day it lists.
AZX shareholders will be suffering a loss, but that will eventually need to be offset against the ownership of shares, and initial value, in AEL when it lists on the ASX.
Hence the reason that AZX has traded down to 21 cents, even when the share purchase plan over the past week or more has been at 24 cents, and it was well undersubscribed of course.
If people are only interested in investing in AZX for Bullabulling, then best to wait until BBG is listed and trading, or alternatively, buy GGG (ASX:GGB) shares now, a price of around 25 cents would represent good value.
I am hoping the new Chairman and MD of Bullabulling Gold will both be really experienced Gold Mining and business professionals, it will be interesting to see who puts their hand up for these jobs.
Gw
Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves. (Norm Franz 2001)
AZX Price at posting:
23.5¢ Sentiment: Hold Disclosure: Held
