Forum Archive Index - September 1999

[Chris <CMR64@student.canterbury.ac.nz>]

Im looking at the same thing myself.  The only problem is that they
require a 90% acceptance rate, and if this isnt met we are left with SHP
shares which will quickly return to their previous 57-60c trading range.

I may yet do just what you're suggesting, though :)


Mark Hubbard wrote:
> 
> Firstly, a quick apology for sending so many posts to this forum recently.
> Up until now I've done all my investing through managed funds, however, for
> various reasons, I have become disullusioned with managed funds - note this
> is as much an administrative issue as one of returns generated by these
> funds (the lousy tax treatment of active funds also is influential). Anyway,
> I'm now looking to do a lot more investing in my own right, hence my posts
> to this forum - ie, I am a bit green.
> 
> My question for this post is simply, what am I missing in the following
> assumption. Today, the directors of Shortland Properties have recommended
> that shareholders accept capital properties takeover offer of .76 cents a
> share. Currently, Shortland shares are trading at only .67 cents a share.
> The terms of the offer are .42 cents would be paid for via fully paid
> Capital Properties shares (at which they are currently trading), the balance
> would be in cash.
> 
> If you consider that at .42 cents Capital Property shares are very good
> value (they have over a 15% gross dividend yield!) as a long term
> investment, then does it not make a lot of sense to purchase heaps of
> shortland shares at .67 cents, then onsell these directly to Capital
> Properties for the .76 cents (an instant 13% gain, less brokerage). You
> would then be left with cash in the bank, plus good value Capital Property
> shares.
> 
> Well, what am I missing?
> 
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