Ann: Talon acquisition update, page-53

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Justadabble

10,203 Posts.

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29/08/23

08:32

Post #: 69602965
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Originally posted by Heskumdai: ↑

JD, if you do this exact same exercise with STX then you'll find it is also significantly undervalued. Your ratios would likely be similar if you compared apples to apples and not just boosted one side to optimistic levels and claim moral outrage.

The market has already provided DCF valuations for Walyering that are largely in line with the STX offer. On this basis your DCF appears to be very generous considering the uncertainties and risks involved. And the range of valuations for the untested ground is pretty significant....

We all have our thoughts on what's good / bad for shareholders for either company. That's what makes a market. Somewhere between the extremes the market usually finds a balance and I personally think the STX offer / balance is right for a script offer. Maybe someone else comes in with a higher cash offer, but that likely won't be much more given the DCF valuations and pre-sold take-off. Maybe they won't have to if STX share price keeps getting smashed making the implied value worse..?

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On the last point, agree. On the NPV, the point is moot as STX are making an unsolicited offer and therefore accept the risk. Afterall, STX understands Walyering better than anyone. On the range of valuations, STX implied offer on day 1 was below base case. If all STX wanted was L23/EP447, they should have structured the deal accordingly. I honestly can't see how any Independent Expert will find this deal in the best interests of TPD SH. The only people that love the deal are STX holders, some of whom hold both.

STX Price at posting: 38.0¢ Sentiment: None Disclosure: Not Held
3 Upvote

1 Great analysis

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