Q: With the announcement yesterday, what could go wrong? What is the worst case scenario? And conversely, what is the best case scenario? You recently indicated the stock price might move to $10. Now with the acquisition, where do you feel it will be a year from now? 5i has been bullish on the stock. Has the acquisition changed this opinion? It certainly has performed very well - thank you.
5i Research Answer:
There is always deal risk. An acquisition is never closed until it closes. PNG could find something it doesn't like in its due diligence. The acquisition needs several layers of approval. Synergies may not occur. The vendor could 'dump' acquired shares whenever they are allowed to sell. Old liabilities not disclosed could pop up. But if the question relates to what could go wrong on this deal, the above covers most of it. If the deal fails, PNG will just carry on as before. We are not big on target prices. In a normal market, with this deal closed, we could see $12. But we could see $6 or $15 as well in different scenarios. We would continue to be bullish here. The acquisition makes us a little more bullish, frankly.