p.s. Periculum - there seems to be a bit of a consensus emerging...

p.s. Periculum - there seems to be a bit of a consensus emerging around the conundrum you raised earlier.

As I mentioned earlier, I'm pretty comfortable personally with scittycross' estimate that SLR/RED will be around a $2bn company based on their current respective market caps.

Winmore advanced that a PER of 13 would be appropriate. Based on a figure of $160m combined annual post tax profit for the two entities, $160m x 13 comes to just under $2.1bn.

Finally, using Winmore's Operational Cashflow of $445m p.a. and BullishBearish's multiple of 5 times, $445m x 5 comes to just over $2.2bn.

Applying this range of numbers to work out a share-price for the merged entity suggests 30-33c - pretty much where the shares have been trading of late.

The market seems to see little likelihood of a competing bid for RED, so there doesn't appear to be much, if any, "potential takeover value" in the current price for RED. Whether or not there's much, if any, of a re-rating of the share-price in future to reflect the larger size of the merged entity is yet to be seen. I've seen nothing to convince me that the combined entity will be worth much more than the current sum of its parts.

Again, at the risk of boring people with the obvious, my feeling is that future increases in the share-price of the combined RED/SLR entity will be dependent upon increases in the AUD gold price and improvement in sentiment for ASX gold stocks.