Wednesday, May 6, 2009

Sky City share offer confusing and unfair for smaller shareholders

I was going to discuss the merits of owning Contact Energy Ltd [CEN.NZ] shares in the light of takeover signs surfacing recently over that company but I will leave it to another day.

I will instead focus on something today that has left me scratching my head.

Many of those that follow my media machinations closely will know that I own a reasonable number of Sky City Entertainment [SKC.NZ] shares.

There has been a recent capital raising to institutions and large shareholders and now we smaller unimportant shareholders are about to have their opportunity to buy an additional stake to avoid dilution of our shareholdings.

Today I received "top-up" offer documents that allow me to buy 1269 shares in the $5 million offer but I have to be either an "experienced" or "wealthy" investor to participate and I must get a "certificate" from my chartered accountant or my "financial service provider" to prove I am either so I can get my new shares.

The only problem is that I don't have either of the above but then I read on that I will probably not be eligible anyway because the top up offer is conditional on the $35 million Share Purchase Plan (SPP) not being fully subscribed, which is highly unlikely to happen given major oversubscriptions in popular capital raisings thus far completed by listed New Zealand companies.

The other wee problem is that I haven't received the SPP documents or booklet that the covering letter says I should read to determine whether I should consider the offer.

The top up offer seems superfluous to requirements because it gets canned if there is an oversub of the SSP but even if there was going to be a top up many wouldn't bother because they have to be "wealthy" (have net assets of $2 million or gross income of more than 200k for each of the last two years) or be an "experienced investor" and be able to prove both using your accountant or financial advisor.

I really cant be bother with the top up because I cannot bloody fully understand it! and it seems to run counter to commonsense because it probably wont occur anyway.

All I am entitled to then is to apply for a maximum of NZ$12500 of shares and it seems given the large interest in the $230 million SKC corporate capital raising carried out in April and an over subscription in the Fletcher Building offer concluded this week, I am unlikely to get anything close to that figure.

I would need to get my hands on around 5000 shares at the offer price of $2.61 per share in order to stop dilution of my position but unlike the corporates and large shareholders my shareholding in Sky City Entertainment of 7 years is going to be seriously diluted.

I will be applying for the maximum under the SSP.

Contact Energy will follow soon.



Sky City @ Share Investor

Sky City CEO doubles down
Sky City Entertainment 2009 Interim Profit Review
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss SKC @ shareinvestorforum.com

Download SKC Company Reports

From Fishpond.co.nz

Bird on a Wire: The Inside Story from a Straight Talking CEO

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz

Fishpond


c Share Investor 2009

No comments:

Post a Comment

Comment on Share Investor Stuff