I,m buying AAG as I think WGR shares at 27c is a bargain if this bid goes thru (75% chance I'd say).
WGR has been floundering in the market since Anglo didn't exercise their buy in option on Rover 1. It would have been nice to be free carried but a big plus now WGR has 100% of Rover 1.
The downside is they need to build a plant - probably $100 million plus. Now where will that come from? Placement and rights issues. MLX will probably underwrite the rights issues as that would increase their holdings and they have plenty of cash from their successful mines.
Bottom line, WGR has a superb asset in Rover 1 but it's share price is subdued due to the AAG takeover (many AAG shareholders will sell their new WGR) and the upcoming capital raise.
Long term looks good to me once we get past the takeover and capital raises.
AAG Price at posting:
27.0¢ Sentiment: LT Buy Disclosure: Held
