Q: Hi,
What do you think of the adequacy of the premium being offered by the buyer for Allied gold?
Thanks.
Mike
What do you think of the adequacy of the premium being offered by the buyer for Allied gold?
Thanks.
Mike
5i Research Answer:
The stock is up 266% in a year, so some leeway needs to be given for the fact that it has done so well already. But the actual premium for control is not great (21%). Yes, it is cash, but we think a larger premium was needed because of deal risk with a Chinese entity. With three mines and 400,000 ounces of production, we think other companies might be interested here, certainly. We also would not see government approval as a slam dunk. We would hold shares. Another offer is of course not assured, but we think higher than usual in this particular case.