Forum Archive Index - September 1999

["Brent Gray" <brent-g@ihug.co.nz>]

You have misread the offer.
They are offering only 34c in cash. The balance, 42c, is by way of a note
(iou) paying an annual interest rate of 8 or 9%?, and you will get your 42c
back in a few years time. From memory its about 5. You don't get any CPNZ
shares.
-----Original Message-----
From: Mark Hubbard <mhubbard@es.co.nz>
To: sharechat@sharechat.co.nz <sharechat@sharechat.co.nz>
Date: Thursday, 23 September 1999 17:50
Subject: [sharechat] Shortland Properties


>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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