Well, now that more details are available I have mixed feelings on this one.
I don’t think an accurate financial assessment of the deal is possible because there are simply too many variables present that are unknown to the public. I agree that the presentation, though lengthy, is generally lacking in hard figures. The multiple paid is supposed to be below the A25, but that assumes the valuation is accurate and given that apparently the traffic volume TCL is expecting is higher than the NSW government estimates there is a real danger that TCL has overestimated its value. TCL has said they had 40 people working on the modelling to ensure it is accurate, and given the lack of detail about this modelling (not surprising I guess) available to the public, I believe no matter how hard I try and dissect this deal, it will not be possible for me to have a truly representative and accurate financial assessment of it (which is a problem). So I am not even going to try (which is also a problem when it comes to investing).
So what I am left with is the vibe....... and the vibe at the moment for me is mixed.
I will say however that I am surprised by the size of the CR (which is also good though because it means less debt) and the price (I think 10.80 is too low, probably needed because of the size of the CR). I do like the length of the concessions and that it adds to market dominance though.
So I will have to ponder on this one some more.
TCL Price at posting:
$12.06 Sentiment: None Disclosure: Held
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