Response to Cashing outI received this email from Peter Block. By the way I like this guy he always answers my emails. Yeah I know it's his job but these days that does not mean much.
BTW It looks like I bet on the wrong horse, I should have bought Look Shares.
Hi Edward,
Glad you heard the call.
The reason Gerry answered the question about dispersing any proceeds the way he did was the company does not want to preclude any offer or offers. At this point, there are several possibilities for the process to unfold. Look could sell assets for cash or a security interest provided by the buyer or buyers, or a combination of both. Until the nature of the transactions or transactions is clear, committing to a distribution of cash significantly limits what would be defined as a good bid. This is particularly true given the current financial markets – if party A offered a fraction of what party B did for the same asset, but one was cash and the other preferred shares, the company would like to consider the implications of both offers without having to accept one because it was cash. That is not to say it would not accept the cash offer, just that it does not want to preclude anything.
Look Communications is the only company engaged in the Plan of Arrangement, not UBS. Therefore, if there are proceeds to be distributed to shareholders, UBS would receive a proportionate amount in line with its holdings in the company (about 51%), just as will be the case for every shareholder of Look.
Regards,
Peter Block