'holic said:
Didn't Mac Bank state shortly after the bid failed that their valuation of Qantas shares was $7.60? That's like a real estate agent you've contracted to sell your house, talking the price down, then selling it to a mate who he knows values it at more than he paid. Oh, and pocketing an exorbitant bonus as well. That sounds like ROBBING the shareholders, rather than maximising their returns.
Actually, if we look again at the relevent history of the bid (a more calm look) we will see that nobody was robbed, and the shareholders received a pretty good offer. We will continue to use the real estate analogy. Consider the house owner in the analogy - he represents the Qantas shareholders.
For the house price, I will use the Qantas share price multiplied by 100,000. Note that for the 6 months leading up to the bid announcement, the share price averaged about $3.50
One day, Mr house owner receives an offer from a buyer that wishes to purchase his house. The buyer is offering $545,000.
Mr owner is well placed to consider the offer as he has been getting daily valuations of his house. Those valuations, over the previous six months, have averaged about $350,000.
Mr owner thinks about the offer for several months but eventually declines it. After declining it, the potential buyer mentions that he feels the house is really worth $760,000.
Nobody was robbed - a good offer was made and, naturally, the buyer will always try to get the house for less than he thinks it is worth!
In the case of Qantas, everybody seems to be forgetting that the market had valued them at $3.50 leading up to the bid. Many posters seem to be suggesting that their "real value" during that time was much higher and that it was Dixon, through his public comments, that was keeping the price low.
Has it occurred to these posters that they can only say that with hindsight? To have been able to say that at the time required the savvy that seemingly only APA possessed. And, these posters are way overestimating the effect of Dixon's supposedly "talking down" comments - they are suggesting that his comments were suppressing the share price by about 60% !
'holic again:
Are you saying it would be in the shareholder's interest that he talk the share price down, placing financial stress on the company ...
No, for the purposes of the debate I was only suggesting that hypothetically.