I also find a lot of the anti-CSG crowd to be unhelpful and prone to hysterics.
I will say this though, they may have an impact on the CSG industry, the proposed takeover, and the share price.
I hold shares in BOW. I also hold shares in Cash Converters. Last week the Government sought comments on draft legislation that would make short term payday loans markedly less profitable, possibly to the extent of shutting down the industry. This was enough to make CCV shares plunge and it was also enough to constitute material change to the company and put the kibosh on a proposed partial takeover. Now instead of getting 91 cents for a third of my shares, they are about to start trading at under 50 cents.
These are not new regulations, it is not even legislation that has been introduced, it is simply legislation that has been proposed for comment. Even if it is put up in Parliament, nothing is guaranteed to pass, and even if this legislation passes in the draft form, it is not clear that there won't be loopholes to allow payday lending to continue, and still the risk of this happening has stopped the takeover.
The CSG issue is a lot more charged than payday lending. I don't think it's likely, but if the market thinks there is a risk of CSG being legislated into unprofitability, the value of BOW's developments and the value potential suitors would be willing to pay in a takeover bid will reflect that risk.
Again, I don't believe CSG will be shut down, but in the current political climate, I wouldn't put it past anyone to propose legislation that would make that happen.
Maybe we need to be contact our MPs about this.
BOW Price at posting:
$1.54 Sentiment: Buy Disclosure: Held
