SML - Synlait Milk Ltd

[Bikeguy]

Using the closing price of $0.40, Bright are adding in $ at $0.60.

Current market cap is $86m. Bright/A2 are adding $218m meaning new value of company is $304m

If you have say 1,000 shares right now, your "value" is $400.

Post this "recapitalisation" your $1000 shares are worth circa $506.

(384m shares plus existing 216m shares makes a total of 600 million shares, dividing new value of enterpirse of $304m by 600m gives per share valuation of $0.506)

Thus there is no dilution and as a retail shareholder you are actually better off.

Legend, many thanks Blackcap

[Mel]

Can someone please explain how/why A2 picked up shares at 43c, when Bright paid 60c?

[Balance]

Can someone please explain how/why A2 picked up shares at 43c, when Bright paid 60c?

Because Bright is paying a premium for taking majority control.

[winner69]

Can someone please explain how/why A2 picked up shares at 43c, when Bright paid 60c?

Probably to do with maintaining their 20% holding …. While keeping total $ raised to a certain amount ..and Bright control premium

[Sideshow Bob]

I wonder if under the revised shareholder structure if A2 will have anyone on the board?

[bulltrap]

Because Bright is paying a premium for taking majority control.

A stealth takeover premium for a stealth takeover.

[Newman]

I wonder if under the revised shareholder structure if A2 will have anyone on the board?

A2 milk would say goodbye to Synlait within a few years.

[whatsup]

As a matter of course every existing shareholder should be given the opportunity to participate in a re-capitalisation of the company they are invested in.!!

Before that happens if I was a share holder I would want to know what is the viability of their Pokeno plant, its not covering costs yet, its farmers are leaving in droves as they do not pay what Fonterra does and its not the greatest area of dairy farming even though they haul milk from a wide area. Farmers will always go to who ever pays the best and highest price even though they have to give 2 years to leave.

[Toddy]

A stealth takeover premium for a stealth takeover.

Not the right words for someone 'saving' the company.
A2 will get what the need.

Retail investors are cornered. They can decide to stay cornered or alternatively save themselves the stress and get out and reinvest in a company that is not effectively privately owned.

I think it's a very positive outcome given the debt stress. It's like winning the lottery.

[bulltrap]

I think it's a very positive outcome given the debt stress. It's like winning the lottery.

It's a small win for those who paid lottery ticket prices for the shares or bonds.

For the retail shareholders who paid a premium to NTA for a solid business, liquidation value should've been their worst-case outcome. But now they're unlikely to get that.