Could another party have arranged the rentacrowd? Photo: PBottrell@smh.com.au

The Premium Income Fund is a misnomer. So distressing has this investment been that, if truth in advertising were a concern, it should really have been dubbed the Discount Income Fund, or perhaps the Income Obliteration Fund.

One would have thought that the archetypal PIF investor would have been a greying and beleaguered Queensland pensioner-type as the average age of the PIF investor is thought to be in the vicinity of 71.

Not on your nelly! Onlookers were dismayed to find that the swathe of PIF investors swanning about the unit holders’ meeting on Thursday this week toting their how-to-vote cards looked more like the cast of Beverley Hills 90210 than Dad’s Army.

This led to speculation in some quarters that a “rentacrowd” may have been enlisted to stack the vote.

At stake are the lucrative management rights to what’s left of the former MFS entity, once valued at a billion dollars, now worth one-third of that at best. Ian Ferrier’s Castlereagh Capital is trying to wrest the rights from the incumbent manager, Jenny Hutson’s Wellington Capital. This week’s vote to instate or depose Hutson was deferred thanks to

legal wrangling.

Instead, we now have a story bobbing up in an online stock forum about two family members who went out one day and said goodbye to each other, only to find that they had arrived at the same destination, each with different voting intentions, yet one more informed than the other.

We quote from Aussie Stock Forums, page 90210, sorry, 7808:

“She received an email from this agency where she is registered on the 20-06-2011 which said … (in part)

‘ … PXT Message: Please call Paul at XXXX urgently on XXXXXXXX re work this Thursday paying $26.63 per hour min 4 hour call.

This is XXXXXXXX the Transfilm shoot tomorrow, please be aware you are ALL being stand ins and seat fillers paying $26.63 p/hr. Details will follow shortly.

Transfilm shoot tomorrow – 8.30am Grace Hotel Marra Conference Room Lvl 2, 77 York St Syd. Wear Smart business clothes.

Reply with full name to confirm message

**** XXXX

Please be aware all the XXXX people at the JOB today will all be paid at the rate of $26.63 per hour min 4 hour call …’

**** realised IMMEDIATELY that there was more to this than being a ”stand-in” or a ”seat filler” (despite **** being still quite young..!!)

**** thought that there were approx 200 people at this 8.30 meeting.”

We tracked down the person behind this, a long-suffering PIF unit holder named Danielle Smith. She stood by her post, saying her son and his girlfriend had been enlisted by a firm called MCTV to front up at the meeting and vote for Wellington Capital to remain as manager of the PIF fund.

Jenny Hutson says she knows nothing about any agency hired to stack the meeting. Could another party have possibly arranged the rentacrowd to vote in her favour? “Anything is possible. We have lots of different pockets of interest.”

The story then got better. Hutson said she had been assaulted by bodyguards acting for the other party. “I was shoulder-charged by someone. I have bruising all down my right side.”

“Lots of extraordinary things have happened,” she said. When asked whether she would be pressing charges, she said: “I haven’t made a decision yet.”

Countervailing Jenny Hutson’s account of the meeting, a Castlereagh Capital director, Phil Armstrong, said Hutson had six plain-clothes bodyguards present – not counting the four hotel security officers – one of which was a former MFS director.

“I was present at every single meeting [between Wellington and Castlereagh parties during the day]. I can say that nobody assaulted her, nobody physically touched her, nobody went near her,” he said.

Foretelling the future is a hazardous business but let’s have a shot at calling the outcome of the $10 billion takeover bid for Foster’s which shook the market this week. Outcomes in order of likelihood:

  1. The bid by Anglo-African brewing giant SAB Miller drags on all year. After much contention, SAB lifts its bid from $4.90 a share to $5.20, then to $5.40 and nails it.
  2. Foster’s fends off bid when SAB goes hostile. SAB walks.
  3. Another big brewer steps into the fray. There is a bidding duel and the victor pays closer to $6 than $5. This is clearly the outcome the arbitrageurs would like to see.
  4. SAB hands down a “knock-out bid” around $5.50 and does a friendly deal with the Foster’s board.

A billion dollars of hot money piled into Foster’s this week. The first decent takeover bid of any size has brought the arbitrageurs out of the woodwork. And the game is on. Foster’s is in play. Although there is no formal offer yet, this game will consume the share market for the rest of the year.

We don’t deploy the word “game” lightly. Forget valuations and fundamentals. Big takeovers are all about tactics, leaks, misinformation, reputational slurs and ego.

Already, stories have bobbed up in the press casting aspersions on SAB’s bona fides as a taxpayer. We can look forward to yarns delving deep in history to exploitation of black labour in apartheid South Africa.

In counterpoint, the belligerent PR mob hired by the Africans will throw up plenty of dirt on Foster’s lacklustre management and performance over the years.

Meanwhile, half the merchant bankers in town will already be off to the likes of Asahi, Anhauser-Busch, Grupo Modelo and Molson Coors to drum up a counter bid. Ten billion dollar bidders are hard to find but we will hear plenty about them being just about to launch an offer.