lively discussion on fgl [ahl]

we had an interesting chat on fgl last night and i would expect some upward price activity today.

Gobby got hammered - but for others its was a productive debate.

link:


The thing is it was in the prospectus so if AHL buyers were looking for quick gains then thats tough luck. Just like the existing holders in Telstra who took up T2. Your buying a fully priced asset.

The other point i would make is this .

Fosters cut off non peforming arms - hotel property via a u/t and the business of running a Hotel group.

For this they called the prefference holders in and launched a buy back of capital on and off market.

They have been punished for two things in my view.

1. having too much cash and not having identified an acquisition target for the broker demands of a yeild of 15 % roc.

2. The strange return of capital via a retail book build with selected tenders from $4.40 to $4.90 plus.
This is a convoluted stratergy and with the slow on market buy back seems to be a very half arsed stratergy to add shareholder values. Thats why Knukel is being punished.


HOWEVER, if you hold FGL once the capital improvement measures are finished MId Jan and th company articulates a growth stratergy with the more than $1.4 billion is capital reserves we will see a rush back to FGL.

Forget the AHL & property trust, just like BHP and Blue Scope they are now Two seperate companies.

( personaly I would book the loss on AHL and buy extra FGL shares......)


A final point is this, with global wine prices and a company like Southcorp on its knees why cant FGL find a bolt on acquisition ?
Surely, their must be an underpeforming wine or Brewer out their ???

singas


I rate FGL a hold till JAN ( mid ) and a buy below $4.40