OAK - Oaks Hotels & Resorts

[skc]

They have directors in common, which means they likely understand how to combine them well. They will pay part cash and part shares.

The all cash offer will cost them $94m cash.
The cash/script offer (1 RFG + $2.6 for 10 OAK) will still require $45m cash.

OAK holders get to choose and I bet you they will all go for the cash now that RFG has fallen 9% on the news.

RFG has a cash balance of $9.6m as of last report, and they already have $77m in debt. I really think RFG shareholders are being short changed...

Interesting I wasn't aware of that the common directors... probably makes this thing more fishy as opposed to any insight to syndergies...

 

[danbradster]

The all cash offer will cost them $94m cash.
The cash/script offer (1 RFG + $2.6 for 10 OAK) will still require $45m cash.

OAK holders get to choose and I bet you they will all go for the cash now that RFG has fallen 9% on the news.

RFG has a cash balance of $9.6m as of last report, and they already have $77m in debt. I really think RFG shareholders are being short changed...

Interesting I wasn't aware of that the common directors... probably makes this thing more fishy as opposed to any insight to syndergies...

Although the RFG offer is unlikely to succeed, since it depends on ASIC refusing to allow Minor's acquisition of 37% of the shares from the receivers.

I don't think it's fishy, the directors wouldn't want to lose their directorship in OAK and also send their other company broke. They will want to benefit and grow their other company.

I am considering buying RFG on this short-term weakness. I can buy RFG, wait for their offer to fail, then wait for the price to rise to where it started.

And even if the offer DOES go through, OAK is a great and profitable company for RFG to own, I'd want to be a holder anyway.

 

[skc]

Although the RFG offer is unlikely to succeed, since it depends on ASIC refusing to allow Minor's acquisition of 37% of the shares from the receivers.

I don't think it's fishy, the directors wouldn't want to lose their directorship in OAK and also send their other company broke. They will want to benefit and grow their other company.

I am considering buying RFG on this short-term weakness. I can buy RFG, wait for their offer to fail, then wait for the price to rise to where it started.

And even if the offer DOES go through, OAK is a great and profitable company for RFG to own, I'd want to be a holder anyway.

RFG must have a cap raising to fund the purchase, right? OAK is pretty highly leveraged, and the banks wouldn't leverage up RFG that much more. They need equity to complete the acquisition (if it goes ahead) - I am just surprised that there was no mention what so ever about funding for the acquisition. May be it is a ploy to extract a high bid?

 

[skc]

I am considering buying RFG on this short-term weakness. I can buy RFG, wait for their offer to fail, then wait for the price to rise to where it started.

So ASIC has granted the OAK shares to Minor, so Minor's holding is now >50% and the bid is unconditional. For some reason RFG didn't think that it needs to make an announcement on that?!

Surely their deal is dead. No let's see if RFG can go back up towards where it started at $2.8.

P.S. I bought a fair few this morning at $2.39 after the OAK announcement - so your plan is working out just fine. Thanks

 

[danbradster]

So ASIC has granted the OAK shares to Minor, so Minor's holding is now >50% and the bid is unconditional. For some reason RFG didn't think that it needs to make an announcement on that?!

Surely their deal is dead. No let's see if RFG can go back up towards where it started at $2.8.

P.S. I bought a fair few this morning at $2.39 after the OAK announcement - so your plan is working out just fine. Thanks

I bought some a few days ago at $2.52 then more today at $2.39. $2.39 is seeming like a nice entry. Good catch, you were quick.

"We are considering our options" is a rather ambiguous statement from management, but I guess that is the end of their offer.

 

[skc]

I bought some a few days ago at $2.52 then more today at $2.39. $2.39 is seeming like a nice entry. Good catch, you were quick.

"We are considering our options" is a rather ambiguous statement from management, but I guess that is the end of their offer.

As with any winning trade - should have bought more! But there was always a risk that RFG was going to raise their offer by 2 donuts per OAK share or something like that...

Unloaded through the afternoon and got may be $2.52 average for 70% of the position. The other 30% I will probably get out tomorrow. I do feel bad (well may be not that bad) for those existing holders who sold me the shares - but it's a zero-sum game...

RFG on its own is not a bad company but they are not exactly cheap. Not to mention the fact that these directors have shown that they are not worthy of my trust (and money).