So which bid was higher? both were to pay secured creditors 100%....the difference is with unsecured creditors....G&M were to pay $35m (I’m seeing 2 cents for all unsecured, incl Fox, CBS , Formula one etc) and CBS to pay only $32m...
How so, when KM was previously reported CBS was the "highest bid"? Because KM effectively reduced G&M's bid by the $7.4m that it had included to settle CBS claims, given that CBS' bid in the end did not claim from the creditors trust.
So even though G&M valued the business more in total (leaving 1/4 of your shares listed, vs CBS taking them all for zero), G&M missed out because of a S4.4m shortfall in other unsecured creditors. That is equivalent to only 1.2 cents per current share! The value of tax losses alone should be more than this.
KM say they haven't considered the tax losses as they’re not relevant to creditors…well they’re relevant to equity so let’s see what the valuation report says about it. KM have not yet got a final of the valuation report, so maybe that gives them an ‘out’, but I’m guessing they would already be aware of KPMG's latest conclusions. I sincerely hope they are fair dinkum and don’t focus on some wishy washy range incl liquidation values, rather they focus on going concern basis which it clearly is.
p.s. I agree G&M had a more complex structure, to allow for delays to media reform laws, but I don't accept it was more risky to deliver.
Though not clear to me that G&M were going to put in any more of their own money… report says all payments were to be funded from an extension of the CBA facility or a new CBA facility. What exactly were G&M going to risk or give as consideration for 3 / 4 of our shares… another debt guarantee maybe?
Anyway, no tears for G&M, hoping the court does a serious examination of this and recognises a fair going concern value for all the shares, then CBS either pays up or even leaves it part listed for a time.
TEN Price at posting:
16.0¢ Sentiment: None Disclosure: Held
