what nick has to say on sky - switzer, page-17

Reading through the comments of the potential sale of Crown to Forge it seems to me that there are basically 2 arguments being made as to why it is a bad idea:
1. Lynas should not sell the asset and instead should develop it themselves
2. Nick is the Chairman of Forge (and major shareholder) and therefore there is a conflict of interest and the deal is not in Lynas's favour

With respect to the first argument vvg26 makes some excellent points. Would Lynas be able to develop both assets?? A while ago I remember posts here on HC discussing the potential to build a Crown facility in Malaysia for about $1B. The questions I have is how would this be funded and what risk would this place on the rare earth business?? What would shareholders reaction be if Lynas turned around now and said "We going to redirect funding from developing the rare earth business to develop Crown. Oh and we are also going to dilute shareholders to raise more money." There would be an uproar and rightly so. Everyone here in HC is talking about the priority being Phase 2 and then Phase 3. So when would Lynas have the time or funds to do anything on Crown??? 5 years?? 10 years?? As a shareholder I am interested in how Lynas plans to maximise the value of this asset for shareholders. At the moment, as far as I can see we get no value from it and I for one am not keen to wait for 5+ years. Therefore as far as I can see the only options are to either spin it off or sell it.

With regards to the 2nd argument. Truthfully, who cares what Nick is getting with Forge. To me that is for Forge shareholders to argue. What I am interested in is what is in it for Lynas shareholders and as frustrating as it might be we will not know that until we see the terms of the deal. As the moment everyone is just second guessing what the terms are under the assumption that the shareholders are getting the short end it.

My position?? Personally I would prefer to take a deep breath and wait until the terms of deal are made public (remember that according to the announcement the sale hasn't been passed by the Board yet and so no details can be made public) and then review whether it is a good deal for Lynas shareholders. For me part of that review will also be to look at what steps were put in place to make sure that Lynas shareholders are getting the best possible deal. Making judgements now, before the facts are known does not seem like the smartest investment strategy to me. But hey that is just my opinion....