The second problem is the selling group. While universities around the country are struggling, some are sellers and some are not. At the moment the stock is all tied together under the IDP Education banner.
So how do you give some shareholders the liquidity event they would like?
Perhaps the quickest way would be an in-specie distribution of IDP Education shares to each of the 38 universities, and arrange a block trade or strategic buyer for the sellers to get out together. That way there could be no arguments about value.
However if that happened, the remaining shareholders would each have a per cent or two of IDP Education’s share register and quickly lose all power they have over their investment, including board representation.
So we look forward to seeing what Flagstaff, MinterEllison and the universities come up with. So, too, do equities desks knowing that there may be a block trade coming at some stage. Bank of America’s desk won the most recent IDP Education block – a $220 million trade on behalf of the universities in June.