Forum Archive Index - July 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

 

 

Mike,

 

Did you read my post of June 25? Since then, BCH fell to $12.20 while DAD rose to $A 6.90.

 

At present, I am surmising that the Alliance will have to pay fees to DAD to secure info. from their Credit Reporting bureau.

 

It is also possible that the Alliance has to get all their credit reporting from DAD by contract!

 

If fees for this service became exorbitant or if the Alliance did not perform as well as expected, then a takeover of DAD by BCH could be possible.

 

Suffice to say, that DAD would promote some arrangement with BCH, who in turn would be alarmed if a third party made a takeover for DAD.  

 

The word " Merger " sounds good but may not apply. If BCH took control at a cost, then they could bring in the Credit reporting section into the Allance and sell some other DAD assets.

 

I have already said that I would prefer CLH, one reason being that it could be cheaper to invest in this stock than accepting an " arrangement " of BCH with DAD which may involve the issue of some 200 mill shares or more to replace the previous sets! 

 

Excellent investing requires foresight and the making of assumptions. The latter may not be correct but if you waited till the actual terms were clear, you may be too late to act!

 

In any case, the signs are pointing to an arrangement which is beneficial to DAD shareholders! 

 

I think that DAD with its somewhat checkered history is selling above its valuation in relation to the already high valuation of BCH.

 

My report pointed at an allocation of shares to each party. Because of the latest price rise of DAD and the fall in price of BCH, a new ratio will not be to advantage of BCH, I feel. 

 

As I mentioned, the location of any HO will determine the currency and the franking of dividends. I am not sure if a Westpac style of arrangement is being looked at! 

 

Gerry.

 

Holds BCH and CLH