SXL 4.23% 62.3¢ southern cross media group limited

Ann: A1N:Update on Non-Binding Indicative Proposal to Acquire SCA, page-4

  1. 214 Posts.
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    29.6c is an unquestionable value, but whose to say .087 ARN Newco shares can account for the rest? The ARN SP would need to hold up a 77c value if SXL shareholders were to break even.

    Their 87% conversion of SXL shares would increase A1N shares on issue from 313m to 522m. Based on the latter, market cap would need to be $402m, from the current $255m~ for the SP to land on 77c.

    There are no guarantees that the market cap will increase in-line with the value of acquired assets. Case in point: HT&E (A1N) aquires Grant Broadcasters in Nov 2021 for $307m. The HT&E SP was roughly $2, market cap roughly $550m.

    IMO, if you believe the SXL SP cannot improve beyond what it is right now, then the best value you could extract is if you sold right now.
 
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