Highly unlikely they'll use the price Ganfeng paid to price the Entitlement Offer/Listing. They'll want as good a price as possible for the EO which minimises dilution.
We're probably not going to see a Prospectus (hence price) until after the meeting in about 6 weeks time. The Short Form Prospectus we see hopefully in the next 2 weeks, will show the distribution ratio, however it won't put a price on it. At this stage the price is irrelevant, we'll just get 80% of LLL distributed on a pro rata basis using whatever distribution ratio they choose.
Having said that, Leo did issue shares to FFX at $2/share on the 15th. Although that doesn't necessarily put a value on LLL, as all shares will be the same class (ie rate equally when listed), they have to price any further issues accordingly.
On the 15th our SP was 79.5c giving a MC of $936m. To arrive at that $2/share they would have an (educated) guess at how much of that $936m was attributable to Leo, then taken into account the planned distribution ratio & the number of FFX SOI to arrive at that $2
eg assume $550m LLL valuation 550m / 1.178b (ffx SOI) x distribution ratio = $2 The ratio would be 4.28 FFX shares for 1 LLL share
Hopefully today they sent the SF Prospectus to the ASX for approval It will show a distribution ratio, and IMO to ensure all the issued shares are equal, they should use the same distribution ratio they used back on the 15th - 4.28 in the above example. FFX's MC has increased since then, probably mostly because of Leo. Today's price of Leo would be more than $2, however they don't need to nominate a price until the do the EO & issue a Prospectus.
By then we'll probably be above 98c (prior to in-specie), so the offer price in the EO would be based on that higher valuation of Leo, discounted to ensure a healthy take up. That will be the 1st time we're given an indicative valuation of LLL.
Of course the market gets the final say when it lists.
FFX Price at posting:
97.0¢ Sentiment: Buy Disclosure: Held
