Well, I don’t agree with you on this one, though I respect your opinion.
As you may or may not remember from my earlier posts, I think this purchase will add to TCL’s dominance in toll roads, and add a bit more depth to their moat. Personally I am not worried about the execution risk because they have done this successfully many times before, or the extra debt, though your points are noted.
I read in the AFR that they will need a 3 billion CR. Back of the envelope calculations suggests an entitlement offer of around 1:8-9 @ say 11.50. Of which personally I would take up the full amount.
On the upside, Mrs Market agrees with me (today anyway) and as the SP has rallied, if you are looking to decrease your holding, you can do so at a better price .
TCL Price at posting:
$12.06 Sentiment: None Disclosure: Held
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