campbell profit guidance, page-7

Based on current EPS numbers a scrip deal is 2.1% accreditive, using debt its 3.3%.

Today's announcement is interesting, they've signed Perpetual through a share agreement. They now control (dont own them yet) nearly 9% of AEC and have put other predators on notice.

Okay, BT and Perpetual have signed up, but that doesnt total 8%. They cannot buy stock above the offer price and the bigger issues they face are the directors, staff and the extremely large retail following.

The Top 20 own 30% which includes - Rod Smith, Ron Grogan and Hamid Sheriff - all directors. Throw in some of the very longterm holders ie. Donald Cant and Agnes Sinclair and the hundreds of staff that own shares through the company plan and you start to get my drift. There's still the big issue of the other 70% retail holding, you only need to look at the current volume to work out what they think.

As for other insto's like Milton and Choisel (both LIC's) they have been on the register for more than 6 years, but are also very large holders of CPB. You would have thought that Minter Ellison would have signed these guys up, but we havent seen a notice yet. Milton is the 3rd largest and Choisel are 8th.

Look I'm not against this deal, I think it makes commercial sense for both parties, but I dont believe that CPB are paying a fair price. I will take scrip but it needs to be improved to somewhere near 1 for 7, instead of the proposed 1 for 8.5. Okay, it might be earnings diluted in the first year, but its figures that have included massive dollars spent on the PSI technology, the product that someone 18 months ago wanted to pay $40m for.

So what will happen now?
CPB will send their bidders statement out (i've heard its on the 5th july) and hope that shareholders will sign away.

All I can say to CPB is, the share price is 10-15c above your offer, so success is close to zero. Retail investors are not interested in its current form, but hey if it was all too easy, Minter Ellison wouldnt be able to generate huge fees for the next few months.

But there's always one winner when it drags on.
:)

Pep