Forum Archive Index - February 2000

[tonysw <tonysw@xtra.co.nz>]

Mark Hutton wrote:
> 
> 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.
> _______________________________________________
> 
> 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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Thanks Mark for keeping us up to date - just when I thought they were
going to be 'pump & flush'.
Might just keep the Prozac at arms length!
Thanx agin
Tony W

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