to match ari&fmg it should 40 cents. , page-16

Below are my thoughts about a ARI takeover. AGO has some similar characteristics

Using the same assumptions AGO's...

FY15 EV/EBIT = 5.4

Reuters FY15 EPS = 10.49 (15 analysts average)


*** ARI post ***

Looking back at 2012 it's share price was cheap/wrong below 0.90 and ridiculous below 0.80 cents. Hence a takeover offer 10 days after it fell below 60 cents.

Then, I would have accepted $1.50 and been happy given the risks and outlook. I suspect the company would have too.

Everything is different now. YES I think it is very possible now. Much more compelling at $1.90+

At Iron Ore 'average' of $US107 for FY15 and FY16 and no currency movement, ARI EPS = 22 cents. P/E = 4.5

Reuters FY15 EPS = 19.6 (14 analysts average)

So at $1.90 is only a P/E = 10

EV/EBIT = 6.5 (market is at 10!) 50% higher
This is the most applicable metric and more useful than P/E

So a bargain at $1.90, is what I am saying.

Book Value = $2.85 so if you take it over at $1.90 you instantly make an accounting profit of 50% on the transaction.

The currency is 10% lower now than Sept 2012 which makes it 10% more attractive!

Iron ore Spot has only ever traded for 14 days now since spot started below $US100.