After my initial bewilderment at this merger deal, I have been struggling to understand the motivations behind it...
maybe you are right and some big shareholders did step in and demand an end to the over the top largess via a merger?
Most would think that is unlikely, but check out the following article about Baker Steel - they are a major CQT shareholder (34m as of their last 604) and this article almost hints at the point you raise;
Mr Baker said he saw "a lot of value in Australia" and expected more consolidation on the back of Conquest Mining's tie-up with Catalpa Resources and Focus Minerals' bid for Crescent Gold. But he said explorers had "probably got a bit expensive relative to the producers" and he saw some obstacles to corporate deals, not least the egos involved. "But we've made it clear that we favour consolidation," he said. "For companies that don't join the bandwagon we're saying 'do we really need to play there?'"
I wonder if David Baker "made it clear" to CQT??? Or perhaps Gold Fields or another big shareholder grew a bit bored of the excessive largess??? It sort of makes sense, because surely you'd imagine that no one would willingly get off what you refer to as "the gravy train" unless;
a/ they were pushed off, or b/ they were going to get more "gravy" as a result of getting off, or, c/ they were, like Mr Creosote, so full of "gravy" they couldn't fit even one more tiny little wafer thin mint in! (apologies to Monty Python for recycling their joke - but toastman started it!!)
Of course there is the chance that there is a genuine belief that this merger deal is so stupendous that it really is the best thing for CQT & CAH shareholders? I will leave people to draw their own conclusion about that... especially to anyone who has actually listened to the webcast of the merger presentation...
http://www.brr.com.au/event/81724?popup=true (specifically tune in between 28 minutes and 35 minutes into the broadcast!)
I imagine there are plenty of other CAH shareholders who would be very unhappy with the merger - especially as the supposed benefits of the merger MIGHT take the CAH share price higher than the existing SBM bid for CAH!!! But as it stands it is very hard to accurately calculate what tangible upside there is for anyone in the merger, as the metrics of the whole thing are a moving target...
How many new CAH shares will be issued to buy out CQT? How many new CAH shares will be issued to buy out the CQT Director Options? How many of the CAH options will be exercised? How many new CAH shares will be issued to buy NCM's assets? How many new CAH shares will be issued for the $150 million rights issue?
(I'm sure you've all modelled it on a spreadsheet as I have, and I'm sure you all understand the "moving target" nature of the metrics involved)
Three weeks in and the market is still unimpressed - with so many unanswered questions, it isn't hard to imagine why?
CQT Price at posting:
42.5¢ Sentiment: None Disclosure: Held
