Ever heard of an offer you can't refuse? Well that's what Michael Ashcroft's Telemedia is putting to BTL's small shareholders. A letter sent out to shareholders from BTL Chairman Keith Arnold informs the utility's small shareholders that Telemedia is willing to buy their shares for almost twice what they're worth.
Telemedia is offering to buy the shares for $10 per share. That's a very generous offer; because the last time shares were sold, it was offered for $5.42 a share. But this offer is only being made to those who own less than five thousand shares. To give you an idea of how this investment has appreciated, those who bought shares in 1988 when BTL was first privatized, paid $2 each.
So what's behind this offer? Our take is that, one: it generates much needed goodwill and dispels apprehension about the new corporate creature and its controversial conception, and two: for Telemedia it gracefully gets rid of hundreds of small shareholders who can be meddlesome in corporate machinations and bothersome at general meetings.
Currently there are about 1,300 minority shareholders and we estimate that about half of these would own less than five thousand shares. That means that the offer won't cost BTL that much and the goodwill and peace of mind that it purchases may be well worth it.
But it's a legitimate bonanza for those hundreds, and for those not interested, the Telemedia letter advises that they are free to hold unto the shares in the new company.
