A strategic review is not an uncommon practice at companies. Some will take a few months, some we have seen drag on for a year. In AIF's case, it is a bit more interesting than usual, in that it is in response to 'inbound acquisition interest'. In other words, they have already been approached for discussion. Now, price means everything, and with a 9% gain in shares the potential buyer may already by less interested. We can generally assume the 'soft' offer was not 'great' otherwise the board might have just accepted it and started deeper discussions, rather than going for a review, which is essentially them saying 'let's see what else is out there'. With last year's asset sale, the company has about $300M net cash, which reduces the price for any buyer as they would get the cash. The stock is not exactly cheap at 33X earnings. Brookfield or another private equity player we think would be the most likely 'type' of buyer. In 2021, the stock nearly hit $72. That's probably what the board would 'want' in a deal, and that would not be a huge premium from current levels (24%). But that doesn't mean a buyer wants to pay that. We would put the odds of a deal in the 30% range. Still low, as egos often get involved, and much depends on whether the buyer wants to roll it in to another entity or keep in separate (where management would keep their jobs).
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