Ann: Tawana & Alliance to Merge and Capital Raising & SIA, page-152

Just some thought on How will this open on Monday.

The merger states a pro forma MC of $446M.
Thats when Tawana is at 37c p/s or AMAL is at around 33c p/s.
TAW is currently at 45c a share which will value the MC at approx $600m from TAW end but $446M AMAL end. So AMAL shares will rise substantially (or maybe not) or TAWs are likely to drop.

There is approx 30% valuation difference between AMAL and Tawana as it stands right now.
If you had spare cash (or can arrange it) and you were a Tawana investor you would think the smart thing to do on open would be to sell out of TAW and buy into AMAL.

As is often the case with these raising there is 10% risk free on the table at current prices.
You can likely expect a % of the raising participants to sell down for a risk free profit.

Canaccord is the underwriter and we all know they have been selling down for a while, they obviously knew this was coming and were cashing in at higher prices to pay for the $12.2M ( $7.8M to Weier ) underwritten placement at 41c. They will also be paid handsomely with fees on both ends. Milking the cow you could say. They will very likely sell down many of these shares and will still have a healthy profit even selling at 41c p/s.

Of course on the flip side there is a lot of news flow that is coming, resource upgrade now stated in Q2, fines study FID, 2nd DMS offtakes/prepayments, Ta offtake, strong cash balance to drive rapid growth, first shipment and revenues but people didnt seem too worried about a lot of those things before the merger so im not too sure why they would be too worried about it now until it comes out in black and white.

Merged group remains undervalued compare to peers but this is not new, we all talk about this on here, so is it good enough to just have a merger proposal for instos to now take a position or will they wait until the deal is completed?

I would hope there is no more dilution but if there is new offtake partners coming onboard they may stipulate they want an equity placement, there will be 1.32B SOI after the merger as it stands now. These will be tightly held shares but it will still effect an instos valuation of the company.

So I guess the question is, is TAW worth $600M as things stand right now compared to $460M before this announcement which is what AMAL is valued at, 30% mis-match, maybe some more patience is required and we will meet somewhere in the middle until some more news comes out?