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Thread: QF sale Poll
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Old 9th Jan 2007, 23:27
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para adams
 
Join Date: Feb 2006
Location: melbourne
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Notwithstanding the limitations imposed by the question I voted "no".
Why is the takeover not a good thing for Q and Aust?
Q - Q is the shareholders of Q Ltd. They are being offered $ now for a company which the Equity Funds expect and require a return on capital of > 15%. According to GD the business plan he and his team have developed and are presently undertaking has been embraced by the Equity Fund group and will be carried out. If the plan is to be carried out anyway and will deliver the capital returns required then shareholders would get a better return for their invested funds if they did not sell. But, the Equity Funds are replacing $11b share capital with $8b borrowd funds and $3b capital on which interest has to be paid. Accordingly, if the business plan is so good to satisfy the Funds then the offer is not good enough for s/h as it deprives them of the future growth. If the business plan is not as good as thought then drastic measures will be taken to achieve the required return. This would also not be good for Q.
Aust - Aust will only get a benefit if the special privileges presently enjoyed by Q are withdrawn. Minister Vaile has announced that this will not happen. Accordingly, no tangible benefit can be seen to accrue to Aust.
Accordingly, my answer is - NO
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