No it's not easier it would actually be harder. M&A is a complicated beast, see it from the best interest of ALL parties involved.
It won't make sense for Obeikan to be purchasing for USD100M 10% of a company (therefore implied value of 1B) that has a market cap of AUD150million. If anyone is even crazy enough to give an unsolicited offer, it would be based on AUD500million market cap, which would at substantial price to what's can be bought at the market, but most likely EUR will reject as it is at a steep discount to the implied enterprise value. I've explained this scenario already in the past, a post to Kiwi.
It would certainly not be good for EUR shareholders if any party offer to purchase "10% of the company for USD100million". Sure it will dramatically increase market cap of EUR but that's for ALL assets including Ukraine, Australian and recently acquired Austrian sites/permits. 10% of CRML for USD100million is specifically just Wolfsberg project.
Also this would be fair value as the pro forma market cap of the merged companies (CRML) is USD972million - and this value is at the time of merger announcement (26/Oct/2022), SZZL share price has increased since then. So it is easier, better and makes more financial sense for Obeikan.
Further, it is more fair for SZZL shareholders too, as Obeikan is simply just topping up the cash part of the merger.
There is no denying and it is a fact that Wolfsberg project has been valued AND BOUGHT by investors for USD750million. Although it's not been acquired in full, investors (SZZL) are paying for a share of the implied pro forma enterprise value of USD838million.
The best outcome is for EUR to own 80-85%, SZZL 5-10%, Obeikan 10% (all approximate) of CRML upon IPO. In hypothetical valuation of 1B, thats EUR/Wolfsberg assets (includes USD15mil from BMW) contributing USD800mil, SZZL with USD45mil cash, and Obeikan USD100mil cash.
So CRML upon IPO, would have:
- Wolfsberg projects assets
- Cash from SZZL $46 million (I forgot the value)
- Cash from Obeikan $100 million (speculation)
- Cash from BMW $15 million
- EU mining cost - loan from EU banks
- KSA chemical plant cost - loan from Obeikan
Hence its not at all "wishful thinking", just based on financials alone that CRML is no iota of a doubt a unicorn, upon IPO. And EUR owns 80% of this company.
Australian fund managers are not allowed to invest in assets unless physically seen and diligence completed. The only way around this is if those assets enters the books. Once Wolfsberg assets are converted into CRML shares, this will be reflected per market cap value on EUR financial statement/position. Once it is there - Fund Managers will scramble to obtain EUR shares as it would be deemed highly undervalued based on financials.
