LYNAS RARE EARTHS LIMITED (ASX:LYC) - LYC - a takeover theory, page-7 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by mmoore1957 ↑

I've been thinking about LYC and a potential takeover and it seems to me that LYC is in a very vulnerable position at the moment. Before I explain why some background.
1. China controls > 90% REE market
2. The world has woken up to the fact that REEs are a strategic element and are critical for our future technological world. No REEs no F35s. No REs no modern military weapons. No REEs no communication devices. No REEs no EVs. No REEs no wind turbines. Etc.
3. While the world appreciates all the good work China has done in developing REE sources & products ,the USA, Japan, South Korea, Europe, etc will simply not want this current situation to prevail. They will want significant Non Chinese ("ROW") REE sources available.
4. Enter LYC as the only ROW supplier of REEs.
5. LYC has fined tuned the operating & product performance of its business and is operating at about breakeven before the current NdPr price increases are factored in.
6. NdPr prices have increased significantly recently, driven by reduced supply and increased demand. The barriers to entry in the REE market are very high in terms of time & cost, so it is unlikely we will see significant new supply within the next 5 yrs. Hence NdPr prices are likely to establish a new higher base.
7. I computed a NPV for LYC incorporating only the current NdPr increases (My thread dated 14/8/17). The number is A$0.53. It is a substantial premium to the current SP of A$0.15
8. Mt Kellett still have about 2.3b shares to sell after full conversion. Their market actions are depressing the SP and preventing it from moving to a level reflective of the true economic value of LYC.

So we have a company in LYC which has substantial STRATEGIC VALUE and ECONOMIC VALUE, neither of which are reflected in the current share price.
Somewhere in the ROW, the situation in which LYC is currently in will be being watched very carefully. They will realise that:
1. LYC is of significant STRATEGIC importance
2. LYC is currently very cheap.
3. There are about 2.3b shares available at around 11.25-13.5 cps.

Hence now is the perfect time for someone to consider a play for LYC. Rarely do you have the stars so perfectly aligned as they currently are in a potential takeover target. There will be ASX technical issues with a takeover of LYC but good advisors can plot a course through.

There you have it. It may be all early morning fantasy BUT LYC is a significant strategic asset and someone (or more than one!) may decide now is the perfect time to strike!

Expand

Takeover at anything like these levels would be extremely opportunistic and I would hope management and shareholders recognise this. I for one have invested in Lynas as I believed it to be an important company. I wish sometimes I hadn't recognised it so early, however I have weathered the tough times, weighed in to cap raisings to keep it going and bought up big time when it traded near it's lows to bring average sp down and find myself with a significant holding. That being the case I'd like to see where this company can go now. My reasons for investing in Lynas haven't changed and I believe more than ever that it have a very bright future which should deliver handsome returns to shareholders.

No.	Vol.	Price($)
1	1079	$6.29

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1079

$6.29

Price($)	Vol.	No.
$6.31	10515	3

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$6.31

10515

No.	Vol.	Price($)
1	1079	6.290
6	14346	6.280
3	39950	6.270
3	15401	6.260
6	28569	6.250

No.

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Price($)

1079

6.290

14346

6.280

39950

6.270

15401

6.260

28569

6.250

Price($)	Vol.	No.
6.310	1222	1
6.320	530	2
6.330	13614	3
6.340	10105	1
6.350	11105	2

Price($)

Vol.

No.

6.310

1222

6.320

530

6.330

13614

6.340

10105

6.350

11105

(20min delay)
Last $6.29		Change -0.010(0.16%)		Mkt cap ! $5.879B

Open	High	Low	Value	Volume
$6.34	$6.37	$6.29	$15.63M	2.473M

LYC - a takeover theory, page-7

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