AME and BTR

It was an amazing day today for shares in BTR, our merger partner, with over 110 million shares traded and BTR ending the day at 2c strongly bid. Yet it may still be possible to get our hands on BTR shares at yesterday's price, 1.7c. AME ended the day at only 6.4c. Due to this huge price disparity, one would not be blamed for wondering whether the agreed deal, which will see AME shareholders receive 4 BTR shares for every 1 AME share, slated for implementation on November 13th, is in some sort of doubt of reaching fruition. However there has been no suggestion of this, and all directors and major shareholders of both companies appear steadfast in achieving this goal. In fact, to the contrary, one would expect that if the merger was in jeopardy, then BTR shares would fall rather than rise.

One does not have to be Einstein to realise that 2c x 4 = 8c, which is the price that AME shareholders will receive if BTR shares stay 2c. And I think that most shareholders believe it likely that they will in fact be worth even more by November. It is a common belief that ASX listed gold shares have sadly lagged the gold price of late, and are only now starting to catch up. In my opinion this would apply as much to BTR/AME with their quality projects and management as to any goldie.

The conclusion is that this price discrepancy (6.4c cost v 8c value) means AME offers a significantly discounted point of entry to holding shares in BTR for those patient enough to hang on until November when the companies merge. Paying less than 6.8c for each AME share allows us to effectively own BTR shares for less than the 1.7c they were yesterday, so we haven't 'missed the boat' of today's price rise.