The data sharing is covered in the update and referred to as a license agreement. Effectively setting up two entities positions one as a new customer for the other I guess.
I suspect that if a straight trade sale was done for a cashflow negative business the the sale might be done cheaply or even seen as a fire sale. Probably not great for OTH shareholders in the short term. Selling part of the business now potentially gets a better price with upside potential for the remaining equity stake in this business in the future.
OTH valuations should be easier as the main operations can be priced on a straight p/e or cashflow multiple with an equity valuation on top. There will be some short term uncertainty on the new business valuation until an announcement on what the 51% equity terms agreed are.
Guessing this is a factor in the SP jump since over last couple of days.
All IMO.
- Forums
- ASX - By Stock
- OTH
- Ann: Company Update
Ann: Company Update, page-4
-
- There are more pages in this discussion • 3 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
LGP
Record revenue of $10.2 million as European demand drives 40% quarterly growth, with $1 million in operating cash inflow and $0.5 million in cost savings forecast