Unfortunately, we are dealing with Chinese companies.
If they are going to put an offer on table, they don't wanna our share price at 23c.
TianQi Lithium paid 76.88% premium in 2012 where lithium price was just at a quarter of today's lithium price.
If Someone offers to take over AVZ, has to be around other premium or higher,
23c x (1+ 76.88%) = 40.5c
What would they possibly be doing?
Selling 10s of millions AVZ shares, push down to 18c,
18c x (1+ 76.88%) = 31.5c
That would save $202m on the deal, if happens.
LATEST ACQUISITION IN CHINA:
On 16 October 2017, a Chinese company bought 60% of a Canadan lithium deposit (still in development, not in production yet) with lithium resource of 14.25Mt @1.4% Li2O (M&I:12Mt), total
LCE 0.258Mt for US$60m.
Yesterday, news reported, some shareholders of the vendor complained
the project was sold too cheap.
AVZ's middle figure of attributable (Exploration target) LCE is about
19.7Mt.
If using that deal base, US$60m / 0.258Mt LCE x
AVZ's 19.7Mt LCE x FX 1.279 =
A$5.86b
A$5.86b / fully diluted shares 2.25b = $2.60 / share
The
$2.60 per share, then apply your discount
DYOR & GLTAH.