Ann: Orocobre and Galaxy Merger - Announcement, page-323

Seriously?

No-one is "buying GXY for $4B"

That's an amateur-hour headline by anyone's standards.

IF someone wanted to simply "buy" GXY, they would firstly require holders of >75% of GXY SOI to agree, which undoubtedly would require a VERY hefty premium to the current market cap.
It would also be ruthless and the buyer would have full say in who they kept on and how they operated and developed (or not) the GXY operations/assets.


On another note...
Imo (and reflecting the comments of others) GXY holders get somewhat "watered down" in this deal.... BUT the acceleration of development could be well worth it.
I'd rather us get SDV and JB in full swing (+70ktpa Li chemicals) in say 4 years instead of 8, and have my ownership slightly watered down, compared to GXY going it alone and not sharing the spoils.

80% in 4 years or 100% in 8 years?
80% in 4 years sounds better to me.

A basic thought exercise re the "watering down" effect:
Let's say that one thinks that GXY is getting a raw deal here and that in MergeCo, the "GXY assets" make $1000M (or insert x number) in 6 years, and
the "ORE assets" make say 60% of that or $600M in 6 years...
at 50/50 (close enough for this exercise), we effectively "each" make $800M.
So, we (GXY) could go it alone and make $1000M, which might take an extra few years (say 8 or 9), or we merge and make slightly less ($800M) in "only" 6 years...
Who is getting a better deal?
"GXY holders" who get less but sooner?
"ORE holders" who get more but have had "their" cash ploughed into accelerating "GXY" assets...?
(Yes this is simplified but I think the point is clear).
Of course there are many factors to consider and it's not just about current assets and what is planned for the next "few" years.
The timing is hugely relevant, and making big bucks sooner opens doors for acquisitions and growth at a critical time in this mega cycle that is just starting.
Even just getting SDV @ 32ktpa running in one go, rather than in 3 stages, equates to serious revenue sooner - do the maths and think about what can be done with bringing forward that level of earnings. I know of a junior neighbour on the salar that could be swallowed whole and allow significant further expansion at SDV. How would 60ktpa for 30 years sound?
Timing, opportunities, borrowing potential, scale, "bullying" power etc are all relevant considerations here imo.

Still lots to analyse and consider.... but it's far more complex than some think, imo.


IMO
DYOR