Ann: Azures Enters Joint Bid TID with SQM and Hancock, page-62

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20/12/23

11:15

Post #: 71544641
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Originally posted by eastwest101: ↑

I would largely agree with that Money of Mine analysis, except maybe for one thing at the end where they point out the winners and losers.

Obviously in the case of SQM its going to be the long-term Li price and a bit of time elapsing to see if SQM/Hancock overpaid for the asset or not, will need to watch Li prices and the project completely drilled out and a resource estimate and then a bit of time down the track to assess the construction and start of mining operations etc etc. maybe too early to tell.

I think lumping in SQM and Reinhart (Hancock Prospecting) together might be a little simplistic when you consider the different entry points and prices between SQM and Gina.

I think that some people forgot that SQM saw the geology and the rocks early, and importantly, took a position early in AZS, I might have missed it but maybe someone has done a proper analysis on the net average price that SQM will pay to complete this transaction considering the initial 20% of AZS was something laughable like $4.2M or so from memory? So unlike Chris Ellison's MIN and Gina's Hancock who entered the picture later - SQM got in early in the ground floor. Obviously the wheeling and dealing since and the share price action subsequently mean that SQM's overall "entry price" or net average can be calculated on the assumption of the current deal being completed.

The analysis could have included "Early shareholders/Retailers who got in early" as a category, and I think we know which basket they fall into as far as winners and losers, some might have timed their exit to perfection at $4.00 earlier in the year but if they have they have their chips but are dealt out of the game from here on in, if there are any more games and uplift to be had. There will of course be a small component of shareholders who entered AZS above $3.70 fairly recently and they will of course have reason to be aggrieved.

The analysis points out that there are "enough" winners on the register of AZS for the deal to be at least a possibility to succeed. Still a few retailers in here who get to vote so anything is possible.

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My understanding is that if the scheme gets up it will be implemented in March 2024. Any holders who came in from March to mid-June this year where the SP was around 50 cents and even those into August when the SP was around $ 2 you would expect to vote against the scheme considering CGT implications. Other significant holders that have held for an extended period would be advantaged by say selling 50% this financial year at $3.65 and the same again early in the following financial year against taking the $3.70 in March.

With the weighting of shares with the 38% removed and a 75% requirement to get the scheme over the line I am not sure it is a done deal. We will have more drill results and possibly an MRE to chew on.

Shareholder voting apathy may be the biggest issue.

AZS Price at posting: $3.69 Sentiment: Hold Disclosure: Held
12 Upvote

3 Great analysis

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