I can tell you a story (a true story) about a company with a fairly chequered history which received a bid worth $1.10 a share( definitely worth $1.10 because it was a cash bid,not one worth seeemingly less each day as the bidding companys SP steadily dwindled). When the % of acceptance figures got into the 80s it was finally disclosed that several fund managers had ,between them ,something of the order of 5% of the shares under their control. These investors stopped the compulsorily acquisition provisos being exercised and finally received over $3 a share in the period the shares continued to be listed as the bidder attempted to get to 90% . Why did the majority accept $1.10 a share ?? Reason 1. The market knew that the assets were solid,and that the cash flow wasnt too hot. The bidder was able to play upon the uncertainty of inadequate cash flows,and boy did they orchestrate their attack around that factor. Reason 2. The bidder mounted a P R campaign that you just had to see to believe. The bidders offer documents looked as if they would have won the News Limited annual award (if there is such a thing) for high class advertising journalism (if there is such a thing). Sound a wee bit familiar? What wasnt immediately known was when the fund managers bought their holdings.TIP : WATCH FOR INCREASED TURNOVERS IN AZA SHARES WHEN WE GET INTO THE 80s,but probably WITHOUT a SSH notice. Reason 3. Companies who make bids for others are VERY organised and know how fragmented is their enemy (you and me). Such companies have a history of wearing their enemies down. Its up to you to resist,not up to them to make it easy to resist. Dont be fooled by the "you could finish up with an illiquid investment" -that is EXACTLY what Toll Holdings said in its highy organised bid for Transrail NZ Limited. Reject the sweet talk and you might just enhance your wealth considerably and get a fair price for your shares ,or even an unfair one ,if you get my drift.
AZA
anzon australia limited
