I would suggest that it would be in the best interests of PRG...

I would suggest that it would be in the best interests of PRG for SKE to payout the 25c cash component as a ff special dividend.  Based on:

1. If PRG don't pay 25c/share as a merger-t/o  consideration it may reduce their exposure to taxes (particularly stamp duty)
2. Payment out of the SKE purse will, in essence, add to their total debt (well, at least not reduce it), giving PRG a larger tax deductibility on debt costs - maybe
3. It will isolate the payment to the SKE business books, allowing the directors to distance themselves from any negativity arising from the numbers therein
4. It will reward shareholders with additional franking credits not available as a t/o consideration

HOWEVER, I am not a tax or take-over lawyer and there may likely be other considerations.