I am sure most of the shareholders would have been aware of it and it was also the subject of a Livewire article which appeared in the Iress list of SIQ market announcements. The fact that I have a personal dislike of TPG doesn't mean I should try to influence others who may have had the same view as Montgomery in the Livewire article and wanted to hang on. Also, the fact that Aware Super was involved should have given it a greater chance of success. My reason for selling was a personal assessment of the risk.
Smartgroup Corporation (ASX: SIQ)
James Marlay: Staying with you, Simon. Smartgroup - the yield was looking a lot more attractive at the beginning of September. It's subsequently received a bid and the share price has jumped nearly $2. Are you a buy, hold or sell on Smartgroup?
Simon Conn (SELL): Controversially, I am a seller of this business because we have seen TPG and many other private equity firms approach companies and then not proceed with the bids. So this is an approach by TPG. It's conditional and non-binding. And so I think there are questions around whether they execute that. And look, we own SG Fleet (ASX: SGF) in the fleet leasing market. It's trading on 15 times and has a 4.5% yield. We much prefer that business - it's better value and I think really well-positioned going forward with its technology platform that they are putting in place to improve their service offering for their customers.
James: Roger, Smartgroup. Is it a buy, hold or sell for you?
Roger Montgomery (BUY): I am going to stick my neck on the block and go the opposite way to Simon. I think it's a buy. It is under takeover as Simon mentioned. I am always interested in what we call post-announcement arbitrage opportunities. And there is still a 12% gap here. I actually think this deal proceeds. In fact, I think the strength of the initial bid, being granted exclusivity, and Aware Super indicating that they will participate in the proposal as an equity co-investor shows the intent to complete. But that's just my view. The discount exists because a few deals have recently fallen over, as Simon mentioned. I think this is a simpler business, it's got a cleaner balance sheet. There is always a risk that a deal as highly conditional as this one doesn't complete, but I back this one going through, so it's a buy.