MQG got 44m in 2008 they paid around 11.5m for staff to run it so netted 32.5m. This year lucky if they get 30m and pay staff 12m so net 18m.
They try to sell the whole but if I was buying the management contract would have to be canned and that needs a price. MQG already taking a hit by having to value Map lower. So want a good price on both. Cannot get that.
So please issue me 150m shares at 21c per annum I get 31.5m and I dont have the staff costs. that gets me back to the good days. It also drops my average cost as I can put these into my pool of stock at a lower price.
Now I can sit there. The income is as good as it was previously and any upside doesn't get seen by map shareholders as part of the cost of cancellation of the management contract.
Now everyones nav has dropped. So when we bring a deal to the tavle at say 5% discount to new NAV everyone says great deal. We can act as advisors and get fees as well as we dont have a conflict of interest etc etc.
Wow it looks like a win win. However within a company with cash if thats a fair value for cancellation why not allow minorities decide whether to pay you in cash or shares. They have just told you that the management contract was their upfront commission they never took and its around 5% of EV.
So you have had NAV in your headlights for some time but now with this issue the NAV will drop so will your target price.
I don't think there is any undue confidence being displayed by them just opportunistic advantage. The deal is not 385m its what 5% of EV is worth. That could and should be a lot higher.
Do your own research before any investment decision I have been wrong before and will be wrong again. anyway this view is pure fiction and speculation.
MAP Price at posting:
$2.59 Sentiment: None Disclosure: Held
