Sorry lads, there are other reasons why Onesteel will not proceed if they get a change to back out (i.e all ords at 3650).
Onesteel would have made a loss last year if not for Iron Ore. They made a $428m profit, with Iron Ore sales contributing $524m - so steel lost nearly $100m EBIT.
That makes them more of an ore company than a steel company at present.
The reason the deal will not go ahead if the allords hit 3650 is because of the slide in Iron Ore prices (almost certain to accelerate with the world staring at another recession).
Nobody wants to buy in at the top of the market.
I suspect it could trade in the low 70's if it doesnt go through - the world is a much more dangerous place than it was when this was announced and WPG were trading at 88c - so I see no reason it would only go back to that.
That said, if the all ords hold steady for another week (unlikey) I will certainly be partaking through a SMSF in pension phase - a guarranteed $1.32 return + remaining shares (in pension phase the superfund pays nil tax and therefore receives a refund of all franking credits). Assuming a 10c share after the distribution I could pick up $200k worth and make an easy $40k. Not bad in this environment.
WPG Price at posting:
$1.19 Sentiment: None Disclosure: Not Held
