Saturday, July 04, 2009

Punch Taverns scrapes through £375m share placing vote

This result is not a true reflection of voters' opinion. Voters have simply been railraoded into this situation. Surely shareholders see themelves between a rock and a hard place: Many will have bought high and see their investment plummet in value and they don't want to sell low. A solid vote against this move by the company and their equity is not diluted but the company then does not have the funds to buy back debt without which covenants might break ; A solid vote for the measure, diluted equity but perhaps the investment survives long enough to recover the losses they've made

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