"DataRoom earlier reported a $5bn New Hope bid for East Coast Rail, as part of a consortium with Oaktree Capital Management and Canadian private equity firm Brookfield."
If only that were not a misprint!
The key problems here are:
- the scale of ECR as a demerged business is much smaller than ideal.
- There are no clear synergies between ECR the named suiters to address that problem of scale, other than being able to do away with board and top management. If it made good sense for a coal miner to own it, Glencore wouldn't have divested in 2016.
The logical buyer would be another rail operator who could strip out duplicate overheads throughout the business. However it seems that either they are not interested or can't bid for regulatory reasons.
- potential bidders know that AZJ is forced to sell or demerge within a particular timeframe and probably isn't keen on a demerger - whatever the press releases claim.
There may be an opportunity for retail shareholders to grab a bargain in the demerger.
Ann: Update on divestment of East Coast Rail, page-10
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Last
$3.36 |
Change
-0.030(0.88%) |
Mkt cap ! $6.184B | |||
| Open | High | Low | Value | Volume |
| $3.39 | $3.40 | $3.34 | $26.03M | 7.756M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 8 | 60787 | $3.34 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $3.36 | 80597 | 4 |
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| Last trade - 16.10pm 23/08/2024 (20 minute delay) ? |
| AZJ (ASX) Chart |