Ann: Binding Transaction Implementation Deed with SQM, page-188

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dolcevita

30,340 Posts.

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26/10/23

13:29

Post #: 70553460
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Originally posted by Fredbear2: ↑

People ask why would someone buy on market at $3.50 or more.

In simple terms, you pretty much have a put option at $3.50. You can't really go less than this. So what is the upside opportunities:

1) Expect higher offer. With SQM at 19.9%, it makes it hard but someone could look at getting 50.1% (control of Azure) and then buy Mark Creasy's 40% and then have an effective interest of 80% in the project. SQM may then sell out.

2) It's pretty much a free option on exploration - the downside price is locked in at $3.50. If you think there is good exploration news to come which justifies more than $3.50, then two potential things could happen:

(a) the independent expert may state that the price isn't fair and reasonable - the Board is not required to continue to support the transaction and they need to negotiate a higher price;
(b) the market doesn't think it is fair and reasonable and vote accordingly (i.e. don't get 75% for the scheme), which likely leads to a higher price.

3) Try and block the deal - Gina and Liontown version 2 (or try and work out a JV like Wyloo did with IGO - although collateral benefit is an issue). Likely a short term spike above $3.50. Long term, it reverts to fundamental value (but likely loses takeover premium).

I'm simply going to hold and see where this goes.

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It's pretty much a free option on exploration

Agree. Plus what are the odds of massive increases in the MR?

They look good to me, So revaluation will be necessary to satisfy the fair and reasonable assessment of the independent valuer.

AZS Price at posting: $3.50 Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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