Q: Odds on PAAS needing to raise their offer and/or another suitor making a bid? Do you feel the offer is good value? PAAS stock correcting took away most of the premium offered by the bid.
5i Research Answer:
We think MAG is an attractive asset, and the break fee on the deal is low at $60M. We would consider the offer decent but not great. Most investors of course prefer cash so they can decide if they want to keep participating in the merged entity. PAAS is not a huge company and major gold companies have much deeper pockets. This all leads to a higher-than-average possibility of something else happening. Most companies do not want to engage in a bidding war, but it happens. We would put odds here about 35%.