Based on my rough calculations, Ruffy acquired 130,951,522 shares during the offer period at $0.84. There are now 41,178,937 issued shares remaining for Ruffy to achieve 100% ownership.
If Ruffy was to offer $3.50 per share, the average cost since the original offer in September 2023 would only equal $1.476/share.
A price of $3.50 per share is much closer to the current fair value; however, based on my projections for future cash flows, it is likely to be significantly higher in the years to come. The value for Ruffy is even higher since it will allow him to restructure finances, share costs etc.
At a final offer price of $3.50, Ruffy would secure an exceptional deal, having successfully acquired 50% of the company for only $254m (or less than $1.50/share).
It’s worth remembering that Ruffy was acquiring shares for $3+ back in 2021 as were Directors and Senior Management. $3.50/share is only a small premium to pay since four years have now passed and Pact Group is now much better positioned.
If Ruffy can negotiate an offer that also includes settling the TIC case—assuming, of course, that no additional benefits are granted to the TIC team beyond the revised offer—then such an arrangement would make even more sense.
I acknowledge that ego can often prevent people from making rational and logical business decisions. Therefore, it is entirely possible that no revised offer is made purely out of spite. In that case, I will still retain my shares (and potentially acquire additional shares) in a highly undervalued business, which will eventually yield returns—whether through dividends or asset appreciation.
PGH Price at posting:
$1.17 Sentiment: Buy Disclosure: Held
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