TSN 0.00% 1.0¢ the sustainable nutrition group ltd

takever price, page-8

  1. 41 Posts.
    Have been watching ACL threads for a couple of weeks .... currently the only stock I own.

    My limited experience with Australian biotech takeovers (the Arana takeover springs to mind) suggests that the takeover price, and the board recommendation as to that price, is in part determined by:

    (i) what is fair value (to which we will all apply the multitude of valuation methods and criteria); and

    (ii) what is the investment strategy of the top few shareholders?

    With reference to (ii), this is crucial as direct negotiations with major shareholders can result in a bidder (say DRR) starting with 40% of the shares and some serious momentum which a small retail holder can find very hard to resist.

    None of the major shareholders will want to sell for a song but if you are an Orbis holding stock like ACL, you only have limited opportunity to 'exit' and realise your investment (on-market volumes just wouldn't support the price if an Orbis exited other than through a takeover).

    In short, in determining my personal strategy about price re-rating events (such as a takeover) I ask myself "What might Orbis/citigroup/etc think is a fair value in the context of its investment criteria and exit/realisation strategy?"

    I don't know enough about our major shareholders to form a view ... any thoughts?
 
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