Forum Archive Index - February 2000

[Mark Hutton <mrkhutton@netscape.net>]

Just adding to the "Let's be kind to AQL investors" evening. 
As Steve alluded to recently in Sharechat, 'The Headliner" published an
article on AQL a week ago and for the benefit of AQL investors, below is the
bulk of the article. For the record, the article appeared a week ago on 9
February.
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WILL AQUARIA TRADE IN FISH TANKS FOR E-COMMERCE?

The continuing screed of scrip being thrown back into the capital market by
Aquaria 21 in recent days has fuelled market speculation that the underlying
story will see an expected transformation into e-commerce.

The 20 million Aquaria shares placed by Ellis Capital at between 16c and 18c
each were immediately soaked up by institutions and larger private investors.
But as expected, much of this stock found its way back to the market after
heavy speculative trading pushed the share price as high as 23c.

Aquaria's divestment of fish-tank interests underscores a realisation that New
Zealand's capital market would always under-value a stock with Asian-based
assets. It's generally concluded that the best way to realise the true value
of Aquaria's Asian fish tanks is list them in Australia where investors have
higher regard for Asian investments.

And with Strathmore already trading at 10x its NAV, shareholders like
entrepreneur Eric Watson and (former Aquaria boss) Ken Wikeley have concluded
that getting "bums on Asian seats" to watch exotic fish is by
comparison….'hard yakka'.

The Watson camp (which controls 10.8% of Aquaria shares) already has a close
eye on future technology deal-flow through its holdings in both e-commerce
stock, Advantage Group and technology investment company, Strathmore.

So what mystifies Bruce McKay, Head of Research with DF Mainland is why
"Watson interests" would want to see another competitor backed into this
space? He suspects that a more likely outcome is yet another reverse takeover
of a going concern.

McKay suspects that the Aquaria shell is likely to be used by Watson to split
off a swag on IT and non-IT related businesses.

Three more obvious options include:
1. His controlling stake in IT company Wang finding its way back into the NZSE
as the cornerstone business in a new publicly-listed technology group.
2. The re-listing of US Office Products with (associated) Whitcoulls interests
or,
3. An opportunity to re-capitalise finance company interests.

Ironically, after the divestment of its remaining fish-tank (aquarium)
interests in Shanghai, Aquaria will look pretty much the way it did before its
metamorphous from former guise as Regal Salmon. In short, it will return
(albeit short term) to a cashed-up, publicly listed shell valued at 4x its net
asset backing at 16c a share.

The one major difference however is its likely stake in the Australian company
Bliss Corporation, itself the cashed-up shell of a former Australian heavy
engineering firm.  Assuming the deal goes ahead, Aquaria 21 shareholders will
vote on it at a meeting no later than early March. This is likely to see a
selldown by placements for cash.

What's unclear is whether the single largest shareholder, Malaysia-based
Oregon Forestry will retain its 17% holding. But as Oregon gave Watson and
Wikeley an option to call the shares at 17c last year, they must be considered
likely sellers at current rates.

Recommendation: Speculative buy until better disclosure on future plans.
Watson's ability to backdoor established businesses into a publicly listed
shell suggests there's strong potential upside here. With share placements now
a done deal, access to scrip could start to tighten up.

________________________________________________________________

So there you are, AQL fans, that's better than Prozac isn't it?


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