The current deal on the table has been put to stakeholders of SEV which KS is one, on the grounds that the board & mgmt have not been happy with the market continuing to undervalue the SEV share price and lack of investment opportunities( in the wake of the GFC?).
However,their strategy of essentially back door listing KS private business Westrac & others into SEV then renaming it SEVEN GROUP HOLDINGS LTD(SGH)is more about control,the much needed access to SEV cash balance, having Westracs(KS) debt wiped away and far less about the so called( fully priced in) growth story eminating from the West, crowded by many players seeking to stake their own claim to fortune.
Sorry KS, but those markets heavily exposed to the movements in the domestic and global economy like media and commodity markets will continue having a bullish & bearish effect on your SP whatever its called or named.
If theres something that instos just don't like its having a stake in a business when you've got someone siting with a holding over 40% and worse, if that stake then quickly moves to 68%!
Effectively, there becomes no free float of shares for the instos to confidently churn around,so as to make a quick buck and justify their own existence on the dealing desk every day to help pay the mortgage.
'BETTER VALUE ELSEWHERE' will be qouted at the top end of town!
This deal,if it gets up might end up being like NLX #2,and the only way to appease the instos and get them onside and for KS to still maintain his % holding and control of the company, the shares on issue might need to be signicantly increased resulting in a reduced SP.
SEV Price at posting:
$7.10 Sentiment: None Disclosure: Not Held
