20-05-2014, 10:56 AM
(This post was last modified: 20-05-2014, 11:02 AM by specuvestor.)
I think firstly we have to agree that there is structural asymmetry in the first place
Major shareholders have inside info through directorship representations, controls cashflows and remunerations, business structures and related entities, corporate actions etc
Minority shareholders OTOH can sell shares easily, don't have to "work" for the company per se, can have a much shorter view that could be negative to business prospects or strategy, hold odd lots and go for free AGM lunch
So in the first place there is no such thing as fair. It is whether it is reasonable and equitable. OPMI cannot demand a higher return than the major shareholders. Takeovers inevitably will be priced positively to the buyer rather than OPMI, otherwise no buyer would do it. Question is whether the pie is split equitably leaving some for shareholders.
One well structured deal is actually CMA. It is not fantastic but very few people can gripe. Usually because the buyer cares much more about their reputation.
Nonetheless sometimes OPMI has to be more active like opmi mentioned else will be trampled upon and people think corporate governance is moot. If the mindset is that the rest are retirees and don't care then it falls under the defeatist mentality mentioned. If there are no laws for OPMI then logically any company that does not need market access to capital would SIMPLISTICALLY make their PnL equals zero through remuneration payments. That's the nature of the capitalistic beast.
Well known shareholders revolt happened as well: K1 and Neratel relatively recently. Usually people just need a banner to rally those who have heavy vested interest and bothered to gather 10%. People with small or odd lots have little interest and are not going to care
That's where alignment of interest comes in.
It's a matter of balance. As usual 中庸之道
Major shareholders have inside info through directorship representations, controls cashflows and remunerations, business structures and related entities, corporate actions etc
Minority shareholders OTOH can sell shares easily, don't have to "work" for the company per se, can have a much shorter view that could be negative to business prospects or strategy, hold odd lots and go for free AGM lunch

So in the first place there is no such thing as fair. It is whether it is reasonable and equitable. OPMI cannot demand a higher return than the major shareholders. Takeovers inevitably will be priced positively to the buyer rather than OPMI, otherwise no buyer would do it. Question is whether the pie is split equitably leaving some for shareholders.
One well structured deal is actually CMA. It is not fantastic but very few people can gripe. Usually because the buyer cares much more about their reputation.
Nonetheless sometimes OPMI has to be more active like opmi mentioned else will be trampled upon and people think corporate governance is moot. If the mindset is that the rest are retirees and don't care then it falls under the defeatist mentality mentioned. If there are no laws for OPMI then logically any company that does not need market access to capital would SIMPLISTICALLY make their PnL equals zero through remuneration payments. That's the nature of the capitalistic beast.
Well known shareholders revolt happened as well: K1 and Neratel relatively recently. Usually people just need a banner to rally those who have heavy vested interest and bothered to gather 10%. People with small or odd lots have little interest and are not going to care

It's a matter of balance. As usual 中庸之道
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)
Think Asset-Business-Structure (ABS)