I hope you're right in the POG because that's the only thing that would make this sensible. Purchasing producing assets at a premium on the premise that a commodity will rise in price is the stuff of a crystal ball visionary. This transaction from back of the envelope calc's is value dilutive for RRL holders. On the current POG this is an exercise in empire building , it brings nothing by way of value accretion for RRL holders at the current POG. At least $200 million of the raise is going to institutions at what will be a 12 month low in the share price.....the Board is pissing away value firstly by overpaying, secondly by paying for it with heavily discounted RRL script. I really hope Anglo use their pre-emptive rights but at this price even with the obvious synergies they have (which RRL don't) I'd think that the price is prohibitive. Let's see what happens.
RRL Price at posting:
$3.17 Sentiment: Sell Disclosure: Held
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