Re: I sense a big insto may have dumped cause an awful lot were taken out quick time in one hit -- ERG trade data forum

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Date Posted: 05:40:41 03/12/03 Wed
Author: Subject: ERG breaks 10c as foreigners depart March 11 2003Banksys
Subject: Re: I sense a big insto may have dumped cause an awful lot were taken out quick time in one hit
In reply to: some one sold a lot in a hurry. 's message, "I sense a big insto may have dumped cause an awful lot were taken out quick time in one hit" on 01:51:12 03/10/03 Mon

Subject: ERG breaks 10c as foreigners depart March 11 2003Banksys

Author:
.vote on a capital restructure could give the smartcard group's convertible note holders effective control.
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Date Posted: 00:08:00 03/12/03 Wed
In reply to: Newspapers reporting result--March 7 2003 SMH 's message, "Noteholders have tickets to ride" on 00:08:00 03/12/03 Wed

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ERG breaks 10c as foreigners depart March 11 2003
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It was once just the ticket. No longer. These investors have been clipped.
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ERG shares traded below 10c for the first time yesterday as the day of reckoning approaches when the vote on a capital restructure could give the smartcard group's convertible note holders effective control.
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But there may be more to yesterday's sell-off than shareholders fleeing the register before next month's vote, which will convert the $250 million worth of listed convertible notes at an effective price of 15c a share.
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Analysts said the announced sale of ERG subsidiary Proton World last week may have triggered the departure of the company's largest shareholder, Banksys, and the selldown.
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Former Proton World stakeholders Banksys, American Express Interpay and Visa bought 75.5 million shares in ERG following its purchase of Proton World from them in 2001.
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The sale of Proton World meant there was no reason for Banksys to maintain the 3.3 per cent (33 million shares) it held in August last year. Interpay still holds 15 million shares.
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Shareholders hoping that the capital restructure will aid a share price recovery could face a long wait, say analysts. While the capital restructure is good for the company, ERG will have to turn a profit before convincing investors of its worth. Analysts aren't expecting a profit until the 2004 financial year.
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The stock closed down 1.5c at 10c with more than 20 million shares traded.

RMC may ditch AdBri

On the surface, Adelaide Brighton's 20 per cent share price slump over the past week appears to defy logic. Compassionate market watchers might even say it's unfair.

While the cement producer recently reported a 66 per cent lift in annual profits, AdBri's share price has fallen 22c to $1.02 over the past week.

Perhaps part of the fall could be linked with the anticipated slowdown in housing construction. But surely there's a better explanation.

One area worth looking at is offshore. A Hartleys research note points the finger at AdBri's UK parent and 55 per cent owner RMC, which last week posted a 15 per cent slump in full-year earnings. Suggestions are now circulating that the increasingly shaky RMC may have to offload AdBri.

Which leads to the second dimension behind AdBri's share price slump. Given the growing consolidation of the cement industry in Australia - advanced by the recent merger of the CSR and Hanson-owned ACH with the Holcim subsidiary QCL - Hartleys said AdBri would need a substantial discount.

"The domestic industry is now highly concentrated and anything other than a trade sale to a global player would attract a substantial discount and could seriously affect the long-term value of [AdBri]."

"The current woes of the parent may represent an effective cap on the [AdBri] share price," Hartleys noted.

Mellon may want it

A little bit of bid talk was not enough to save Computershare yesterday, with the stock tumbling another 13c to $1.47 as investors worried about war and took a more sanguine view of the sharemarket.

But the talk did raise the question of how low the share price has to go before a bid appears on the horizon.

In the frame yesterday was a perennial favourite of the past two years, Mellon Financial Group. The US financial services giant launched a global investments operation in Australia last week and reports suggest vice-president Ron O'Hanley hinted at a future role in Australia's share registry game.

Mellon is number one in this business in the US and already owns Melbourne superannuation admin and outsourcing show NSP Buck.

Certainly, the chances of a bid for Computershare are increasing the lower the share price goes, although there are some obstacles. One rather big one would be the hefty chunk of shares held by Chris Morris and the board - estimated at around 20 per cent - who would be loath to sell at current price levels.

There's also the fact that, despite Mellon's growing presence in Australia, it's never shown much interest in becoming a global share registry business.

That said, there are global companies out there - BHP Billiton for one - that have happily admitted they gave their business to Computershare because it's the only global player in the market.

Mellon may well have clocked this and, at 7.5 times earnings, Computershare is looking pretty attractive. For a company the size of Mellon, which has been building its presence Down Under, such a purchase wouldn't make a big dent in its wallet.

Edited by Jan Eakin

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