Hi SeeTheWorld, Your calculations look correct to me, but I was...

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Pistol007

209 Posts.

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11/05/23

20:23

Post #: 67731049
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Originally posted by SeeTheWorld ↑

Okay, bare with me. I have tried to put this into numbers. I think I have done it correctly, but please look and tell me if I have done it wrong. I have a feeling I have overlooked something.

My assumption in the first scenario is that when the company's merge, the merged company will retain the 6.4x ratio Livent held in the US. If I have plugged my numbers in correctly the AKE component should rise to $24.07. So, if your selling out now you might have some sellers remorse in the future.

In my second assumption, I increase the multiple of the valuation from the combined company for 6.4 to 7.5, factoring in the potential for improvements in the bottom line, cost savings etc. Basically, they will value the merged company more. In this scenario AKE shares would be worth $28.29

So please check, and let me know if I have made a mistake. But if my calculations are correct at some point in the near future the value of the AKE share should become somewhere between $24 - $29. So let's round and say the share price should double from here.

If these assumptions and calculations are correct, can one really complain about the outcome? This would change many long-term holder's lives.

This is not advice, but please consider the numbers and check for correctness before putting a sell sign on your shares.

Make your own decisions. DYOR!

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Hi SeeTheWorld,

Your calculations look correct to me, but I was thinking that Livent's EBITDA will increase over the next couple of years, as on the conference call Paul talked about how they have fixed price contracts that will roll off, so they are under earning until these finish, at that point EBITDA will increase significantly. It really depends on when the US market starts to factor that into the calculation, we could be well north of $30 then.

DYOR

Last edited by Pistol007: 11/05/23

AKE Price at posting: $14.94 Sentiment: Hold Disclosure: Held
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0 Great analysis

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