Book value is now about 75 net cents a share (3.5 billion with debt of 2.9 billion including redbank debt). If the offer is 20% below book there is zero value for equity.
Administration and zero return is therefore possible.
IMHO the most likely offer is a few cents in order to get the shareholders to agreee to some form of reconstruction.
NAB was reported yesterday as having sold their secured debt at 74 cents. If there was talk of a take over why would they take a haircut at this late stage?
I would expect to receive in a few weeks a letter explaining why the 50% offer above the vwa price is better the alternative of administration. Hopefully GPG can massaage this up above what it might be offered at.
cheers
AEJ Price at posting:
5.5¢ Sentiment: None Disclosure: Held
