THX will be a direct beneficiary of a bid for UMC as Kevi said earlier. I think it will need to be above the $1.35 that the Chinese group were willing to pay for it to have a positive impact on THX which holds around 20m shares in UMC.
Ocean Equities thinks the sector will potentially get a re-rating so any ideas on who the winners will be if a bid comes in?
"Re-rating across the junior sector? We believe completion of a change of control transaction, at a likely significant premium to the current share price, in UMC will be a significant catalyst for the junior sector. The initial reaction of the market was to see FRS up 14% on UMC’s trading halt (likely to be driven from speculation of a further Chinese investment in a similar way CRM co-invested in both FRS and UMC). However, we believe the likely emergence of another groundbreaking domestic transaction will lead to a re-rating of the Pilbara junior sector."
