GPG’s Low Ball Bid for MMC Contrarian
Guinness Peat Group Plc (GPG.AX) via it’s subsidiary Ecurb Australia has announced a low ball takeover bid for MMC Contrarian (MMA.AX).
The $0.48 offer which GPG details in this bidder’s statement is less than MMC Contrarian’s net tangible assets.
Nicholas Bolton must have sniffed out the likelihood of the offer and has taken up a 5.3% stake in MMC.
I last posted about MMC back in early March during the market nadir. The current price represents a lackluster 40% return from then, though I’ll take that…or actually I won’t take it. GPG will have to increase their offer to get my shares. Here is what I said in March, “MMA was cash flow positive for the first half of fiscal 2009. This is not a cash burning biotech. The current model gives investors plenty of time for the market to re-weight shares and close the NTA discount. Australian funds management is an attractive business with government mandated growth due to the 9% superannuation levy.”
Here is the 2009 Annual Report. Even lazy investors should be able to scroll down to page 2 to check the NTA as of June 30. It’s 57 cents. Sir Ron and co appear to be as cheeky as ever, trying to buy assets for less than they are worth. Oh, then there’s also the 8 cents tax benefit MMC has been carrying. So Ron wants 65 cents for 48 cents, a 35% discount and all the businesses for free, yeah nice one. While we’re all being hopeful I may as well say I want world peace.
But wait, there’s more. It’s late now, but what about CCFS which MMC bought in April for $8M and is now carried as goodwill of $4M. Then there’s the $6M coming from the sale of MMC Asset Management. It’s not hard to get to a tangible value of around $0.73 for MMC and Ron offering how much? 48 measly cents. I’m all for MMA being taken off my hands, but I don’t want to be mugged.
Dear Ron,
If you want my shares pay me what they’re worth and a little more for your control premium, until then rack off back to New Zealand.
Yo Nick,
Dude, do something about that hair of yours.
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