Proofreeder & Peter
Thanks for that I did misunderstand what you were saying re the 75%, I thought you were referring to the % of Mayoko DMC owned (which is 80% by the way)
But I stand by my opinion on this deal being good for CFE especially if you also consider tax implications.
If we had sold DMC for current EV of 161.6M (unlikely we would have got this much without JP Morgan, Blackrock and Och Ziff on board) CFE would have paid corporate tax on the profit of around $40 million (161.6m -35m x 30%) leaving $121M for CFE and no further upside.
By taking shares and $47M cash tax is reduced to about $3.6m (47m-35m x 30%) giving a current value to CFE of $93.8m plus future upside plus royalty.
So saying "CFE sold it for 47m. About 75m gone in a flash." is still simplistic and misleading.
Furthermore if CFE decide to provide an in Specie distribution of AKI shares at some stage CFE will not pay Tax on any further upside.
Also Peter you said "The board booked a paper pofit of 3.6m on day 1, although I expect that will increase dramatically. Pity other CFE shareholders weren't included in the pay day."
CFE shareholders booked a paper profit of an additional $14.4 million on day one through the increase in the value of their 120M shares so we were included in the pay day right?
Apologies again for misinterpreting your statements re the 75%
I'm no expert either but I really think TS has done the homework on this and not rushed in to grab a quick buck.
Add to My Watchlist
What is My Watchlist?
