Hi Grizzle1,
What is happening over the fence is very relevant here in some ways, but a totally different situation in others.
Firstly as there has been a 'proposed control transaction' admitted by the company, ie a potential takeover. Should this happen then it will tend to underline the value of Pilbara, despite the current market cap. Since that announcement the price price of Altura has fluctuated between $750m- $900m. A T/O is usually priced at 30-40% above current market price, and sometimes has to go higher.
Taking the mid point of current valuation being ~$825m and going 50% higher to get the deal done = $1,237M. That sort of price leaves current shareholders a good gain on current price, but also leaves plenty of profit for the acquirer. (I hold a small interest there)
For Pilbara, with a current MC of ~$1.48B (fully diluted), this makes our current price look very low being only ~20% above the T/O price of Altura, by having 4 times the resource a larger plant (and expansion plans), plus theoretically better more diversified off-take partners.
Their situation is also vastly different from ours in the potential acquirer already owning just on 19% of the company, with directors and one major holder having another ~25%, so effectively deciding the fate of the 'proposed control transaction' between themselves.
With Pilbara, the share register is wide open, with both Chinese and Koreans highly interested in our company. This last deal KB did with POSCO is a bit of a masterstroke IMO as it pretty much means there would be a bidding war should either side wish to acquire us. I can't see either the Chinese wanting the Koreans to have control of our asset, nor the other way around. Also neither would like to see a major current lithium company having a controlling interest in us.
Given what is happening next door, it is obvious there is interest in acquiring lithium assets, so many companies do not believe the rhetoric being spread by some analysts about oversupply.
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