Value Opportunity, page-64

I doubt that MGX have the M&A and operational capability to manage the risk of diversifying into new commodity areas, hence the share price discount. It would be much safer to stick to what they know. A merger with Grange, although highly unlikely, has a much superior strategic rationale - should it happen I will happily buy Auto's stock at 30c when he heads for the door.

The major risk, however, is that management does nothing and continues to string shareholders along for years. It might be that the major shareholders view MGX as a convenient vehicle to hold cash until they have another use for the money or until the exchange rate improves and makes it more attractive to take the funds out of Australia.

I will be looking for more concrete plans from management as to how the cash holdings will be used to maximise shareholder value. I would want to see a deadline for making an acquisition that would need to be subject to a shareholder vote. If no acquisition occurs by that deadline, the funds should be returned to shareholders through a capital management program.

We need to stop giving management the benefit of the doubt and start pushing for action.