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27-02-2014, 06:06 PM
(27-02-2014, 04:40 PM)mm63 Wrote: I am surprised that they did not make any provision for the success fee ($15mil++) due to MIMAL if the total divestment exceeds $694.9mil. TBC ($522mil) plus CXP ($111.5mil) already adds up to $633.5mil. Given that the valuation of HNE is $155mil, it seems extremely likely that the $695mil threshold will be broken.
Assuming that they sell HNE at $155mil, does that mean that the success fee of $15mil++ will come out of the $155mil? Which means it eats substantially into the capital returns to the shareholders?
1) There is no guarantee they will be able to divest HNE at that valuation or even at a valuation that will hit the $695 million figure.
2) Yes, The success fee will come from the sale proceeds. The previous divestments did not lead to a retaining of cash for the success fee ie shareholders benefited from the full payout.
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