Potential Takeover Offer Price, page-26

There are a couple of ways I see this playing out:

1. Friendly Takeover: potential buyer (E.g. Huayou?) makes a formal offer to the BOD with a given share price and shareholders vote whether to accept or not. In this case the current share price might act as an anchor point for that initial offer.

2. Hostile takeover: the buyer starts buying AVZ shares on-market until they accumulate 20% of the company. They then have to formally announce their intentions to take over the company (though not the price they are willing to pay to do so) and shareholders can decide whether to sell on-market or not. Because the market knows someone really wants the share price usually increases as shareholders want to see if the buyer will purchase at a premium. Again the current market price can be a mental anchor to set the floor price.

3. Asset sale: AVZ just sells the mines (can sell them seperately) to a buyer/s at an agreed price and either distributes the funds to shareholders or reinvests in future exploration.

In the first two cases the share price offered is going to be at a premium to the current price. In the third case the offer price is probably not related to the share price in any way, since the buyer likely won't care what our market cap is, they just want to get their hands on a valuable asset at a price that they find attractive.

So really the key in all three outcomes is whether AVZ can get interested buyers to start bidding to acquire the assets and to me that is entirely in the hands of ML and KE. Once theres an official initial offer you watch the SP rebound. Expecting the opposite (SP to indicate the value of the offer) is IMO the tail wagging the dog.

All IMO. Interested to hear others thought.