Ok valid point - i was objecting to the rational of valuation relative to buy price.
I agree its likely we will see a higher or superior (cash) offer - as there are many companies that have actually gone to market and successfully raised capital for the purpose of distressed asset acquisition. Even though DIO is not distressed as a going concern - they are trading at prices that suggest they are.
Lhir, Newcrest, La Mancha just to name a few, have raised cash and could easily add. La Mancha is the obvious one as ultimately the prised asset is a minority stake in FL which will be less attractive to a big player than a majority stake. LM could use the mill, and take out the remainder of the positive cash flow.
It would be mush easier and cheaper for them to do it now rather than try to extract the asset from Avoca down the track.
The usual way to play these situations is to hold and see what eventuates - and if possible arbitrage the opportunity.
DIO Price at posting:
50.0¢ Sentiment: Hold Disclosure: Held
