It's an interesting proposition that CPB now face. They will be required to update the market this week or an increase of stake of more that 1%.
With the CPB share price increasing the AEC share equivalent is up to $3.76, but really that still falls short of the mark. Only an offer above $4.30 will have any chance of success and that's a CPB share price of $36.55.
As for question regarding whether CPB will withdraw their bid or up the ante, I still think the latter. They have not convinced any other institution to come over with this offer and as I pointed out in a previous post, one insto is a fraud.
Ammtec has a great business, one that would fit beautifully into the CPB fold, it might cost them a few more dollars, but it would be well worth it.
The other point is the longer this takes the harder it will be, especially if the overseas labs are currently dealing with Azure.
As for the threat of the share price falling after the bid, its possible but I think unlikely with the numbers AEC are projecting.
In the CPB bidders statement, they question whether AEC management can be trusted.
Well, they exceeded FY10, they have a $1.5m contract with PSI and the current labs in Macadam street seem to be running 24 hours a day - 7 days a week. As for the new lab on the corner of Macadam and Balcatta Road (the SPP money). The pad is complete and the tilt-up walls are beginning and we all know how fast they can knock these buildings up.
Hold tight people, CPB will not be happy with a stake below 50% and with the current holding under 10%, this bid will need to be amended.
Regards S
AEC Price at posting:
$3.72 Sentiment: None Disclosure: Held
