institutional shareholders the key

Irrespective of the lowball valuations being quoted in the AFR/Reuters articles, the key question is what price will institutional shareholders take for their holdings?

Orbis averaged its 5% holdings at $0.67 (see August 2011 substantial notice). Most of the other institutions will have averaged in at prices higher than that, so unless you think these institutions are going to sell on the cheap, they'll collectively be holding out for a decent premium to the current price (67c).

EV/EBITDA valuation of c4x-5x seems cheap. If buyer may be willing to pay c6x-7x (still not particularly expensive) there's a good chance of a premium of c25%-50%.