Forum Archive Index - July 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Well, I guess I had better come clean on this whole affair...

The situation:  RBC is to be bought out of FFS by being paid the 
equivalent of 37cps.

If this deal goes through, then small shareholders will get an 
inferior deal to Rubicon shareholders.  

But, if a small shareholder: 

1/ Votes 'No' to the deal, and 
2/ The deal goes through, 

THEN there is a chance,as a dissenting FFS shareholder, you can order 
FFS to buy you out as an 'oppressed minority' (not sure of the 
technical term, but I think this conveys what I mean), at 37c.

Of course, no sharebroker could tell their clients to vote NO 
'officially'.   If enough people did that, then the whole deal might 
be torpedoed.   My guess is that most investors will be dumb-struck 
and not send in their proxy forms at all (as is usual with most small 
shareholder proxy forms).  If sufficiently few vote against the deal, 
such that it is not stopped from going through, then a 37c per share 
payout might be had by those savvy few who held out.   My take on 
this is that the savvy investor should vote NO to the deal.

However, there is a problem with this strategy.  If there are too 
many people voting 'NO' then the whole deal will be in jeopardy, and 
it would be better for the small shareholder to vote 'Yes' to ensure 
the CITIC deal goes ahead.  My feeling is that the numbers may only 
become apparent at the FFS special meeting itself.  Really, you need 
someone at the meeting to take the measure of the meeting to find out 
which is the best way to vote.  I know Bruce Sheppard is going to the 
meeting and will be making his views known.  In fact I believe he has 
exactly the same idea as I do: vote NO and be bought out at 37c.  So 
my thoughts were give Sheppard the proxy vote in question and let him 
decide.

If the deal goes through, and sufficiently few small shareholders 
object, then those shareholders could club together and get the 37c 
payout.  

Any comments on my strategy?

SNOOPY

disclosure: No FFS or RBC myself, but someone I know wants to know 
what to do with their FFS.





---------------------------------
Message sent by Snoopy 
e-mail  tennyson@caverock.net.nz
on Pegasus Mail version 2.55
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"Stay on the upside of the downside, 
Anticipate the anticipation!"



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