I’m not a mathematician, but I can’t work out how an acquisition at ev/ebitda ~10, is more accretive than a share buy back at an ev/ebitda of 7.
@Transversal can you help me?
If my understanding is correct, the comparison is made on an IRR basis (i.e. essentially as a weighted average over the expected life of the assets), not looking at EPS in one particular year; so, if the expected growth rate of the acquired EBITDA stream is sufficiently higher than the one of the existing EBITDA stream, it is possible that an acquisition made at a ~10x EV/EBITDA does indeed increase the overall IRR more than a share buyback would.
Overall, if one accepts the premise that AZJ had to diversify beyond coal, I think the terms of the deal are acceptable; the way I personally see it is that AZJ have taken the risk of re-selling/de-merging the ECR in exchange for terms that were not unilaterally dilutive for the asset they actually wanted.
I’m not a mathematician, but I can’t work out how an acquisition...
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$3.78 |
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Mkt cap ! $6.957B | |||
| Open | High | Low | Value | Volume |
| $3.81 | $3.82 | $3.76 | $34.91M | 9.237M |
Buyers (Bids)
| No. | Vol. | Price($) |
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| 2 | 34792 | $3.77 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $3.79 | 34499 | 2 |
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| Last trade - 16.10pm 03/05/2024 (20 minute delay) ? |
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$3.79 |
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| Open | High | Low | Volume | ||
| $3.82 | $3.82 | $3.76 | 1175331 | ||
| Last updated 15.59pm 03/05/2024 ? | |||||
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