Forum Archive Index - July 2000

[Chris <cd@ak.planet.gen.nz>]

Brian, 

This is an interesting observation.  You are right, the figures do not 
reconcile and the ASX has not picked it up.  Strange that the NZSE, where 
RMG principally trades, has not posted the same announcement.  Nothing 
from ELD either which is a surprise considering lesser value investments 
have had generous PR announcements.

So I phoned Alan Clarke, ELD CEO, and this is his response to my request 
for clarification.

"Yes that would be about right.  We've got about 20 something, I'm not 
too sure of the exact amount.  No we haven't increased our interest 
lately.  Don't know anything about the ASX announcement (of July 10).  I 
would be happy to clarify it for you, can I call you back."

That was about the crux of the conversation.  He was on his mobile at 
what sounded like a restaurant in the mid afternoon today so I'm not 
expecting a call back till Monday.

If the figures are right, the ELD interest in RMG is worth about $47m.  
Now look at ELD's own capitalisation.  137m shares @ 43c, about $59m.  
Maybe ELD is not the *expensive way* into RMG Brian.  We will not know 
until some clarification from Alan Clark is forthcoming.  

Now go back now to the ASX RMG announcements of July 4,5,10 and 10.  None 
of these showed up on the NZSE.  If you tally the shareholdings of these 
parties; Catillus(15.2%), Laurens(8.2%), Watson Cullen Golf and 
Spell(26.46%), and Eldercare(26.46%) you have 76% of the company.  Throw 
in a few more vendors who took shares in lieu when they sold to the new 
RMG and you have a major crop of shares, most of which are under escrow.  
Yeah I admit it is all a bit of a rough stab but there may be a very nice 
trade/invest opportunity hiding away here.  A bit more probing might 
uncover it OR it might be just a clever case of convenient share parking.

I'm definitely not going to punt on this or today's option announcement. 

Interesting that Mike had a dabble but has his doubts while Warner 
reminds him that RMG 'has 25% of the AU market already' .  It really is a 
wonder how we all read what we want to hear sometimes.  Fact and fiction 
are often a beautiful blend.  The way I read the today's announcement was 
it  was an OPTION to buy Credit Solutions not a done deal.  Therefore RMG 
will only have 25% market share when the deal is done and the new 
business is bedded down by end of Dec '00.  

ABN AMRO have RMG as a Spec Buy but acknowledge no research of there own 
on the company.  Their 2nd hand research values RMG at NZ49c on a DCF 
basis with a 12 month price target of NZ55c.   

Simon, you might be the one spending the smart money this weekend.        
  

Will post Monday if I get a call from Alan Clark.

Regards,
Chris D


Brian wrote,

>I got the figs from the notices to ASX ...in summary:-
>
>10 July  Eldercare NZ Ltd increased its relevant interest in RMG Ltd on 
>22/06/2000 from 12,716,055 ordinary. shares (19.9%)  to 128,815,809 
>ordinary shares (26.46%)
>When I look at this again there is an error either in the first % or the 
>holding as the figs don't equate.
>However I think the new fig is probably correct as it matches the other 
>statement relating to Watson & Co.
>
>This would give an overall 'shares on issue'  fig of  some 486M ( I haven't 
>been able to cross check this)
>
>10 July 2000 Eric John Watson, Cullen Investments Ltd, Golf Investments Ltd 
>& Spell Investments NV became a substantial shareholder in RMG Ltd on 
>22/06/2000 with a relevant interest in the issued share capital of 
>128,815,809 ordinary shares (26.46%)    (same fig as ELD)
>
>This second announcement is somewhat surprising as I thought Watson was 
>already a substantial shareholder, maybe this is a rearrangement?
>
>The interesting thing about Eldercare is how this appears on their books 
>i.e. where did the money come from ?  It would seem they are into 
>RMG  boots and all !!  But it makes ELD an expensive backdoor to RMG.
>
>Regards
>Brian

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