wow that's a punishing new issue, page-11

This rights issue is definitely punishing. NTA was around 80 cents on a 42 cent share price before the rights issue. Devine was doing just fine selling properties in the GFC before the raise. A large full year dividend was even forecast before the raise. The new CEO, David Walsh I reckon wants a bigger company with the bigger pay checks that come with it - the manager / shareholder conflict model.

If you are a shareholder you should take the rights. I am not sure what happens if you do not take the rights - whether they sell the entitlements and you get a few cents per right or you get zero. Either way, they are both grim alternative scenarios.

On a 1-2 month timeframe I think DVN is an excellent investment. Usually during a large rights issue its the best time to buy most shares. Also the market has smashed the share price so its well below theoretical NTA.

Long term I have concerns given possible conflicts of interest with Leightons ( eg. the sale of the King St Joint venture where Leightons sold it one month later for a profit)and the fact anyone can be a developer. David Devine will be competing with DVN for undeveloped housing development sites in the future.

Leightons, the CEO and the board should be investigated by the ASX for ripping off poor common shareholders. Leightons gets free control of this company and an extra large share entitlement.