Shareholders in Consolidated Media Holdings watched their stock plunge 48c to $3.82 in morning trade as we all learnt through Lachlan Murdoch that an announced deal isn’t worth much in the current market.
ABC Learning is copping the same treatment and, making matters worse, Bell Financial Group has this morning pulled out of the Tricom rescue. Well, the one page statement reads as follows:
Bell Financial Group (ASX: BFG) announces that the conditional Heads of Agreement signed on 19 February 2008 with respect to the acquisition of Tricom has lapsed. However, discussions are continuing with a view to reaching an agreement.
In other words, Tricom’s Lance Rosenberg can forget about finishing up with his reported 15% stake in Bell Financial Group, which has its own problems with the stock plunging from $2.40 to $1.30 since the December float.
A report in The Australian last week suggested much of the Bell share register is owned by staff supported by margin loans, which is not the sort of base from which you want to take over a shop like Tricom.
The setback has caused more shudders across the market, especially in the Babcock & Brown stable which was joined at the hip to Tricom for so long.
The Australian reports this morning that Lance Rosenberg is currently flogging his stake in Glenrock Station, the Hunter Valley property he bought with Babcock CEO Phil Green and other investors for a reported $23 million in 2006.
Phil Green’s reluctance to simply take out his mate is just another warning sign about Babcock which has tumbled almost 10% in trade this morning. If Tricom isn’t rescued, what will happen to all those margin loans supporting the various Babcock satellite funds?
Paper wealth isn’t worth too much these days if you are loaded up with debt. Forbes magazine has this week declared Fortescue Metals founder Andrew Forrest is richer than James Packer and after today’s trading, this is hard to dispute.
The tumbling Consolidated Media Holdings, plus a calamitous 16% plunge in the Challenger Financial Group share price this morning, is literally wiping plenty off the Packer pile.
Check out this fabulous Adele Ferguson piece from The Australian last week explaining why Challenger is also looking more like a house of cards. Perhaps a Packer bailout is in order.
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