Aka, founder-owner family aversion to the prospect of dilution.
That, and a bit of opportunism.
As I was discussing with a fellow long-term SDI shareholder earlier, I suspect the vendor of the block of land had got wind of the expansion plans and approached SDI with the offer to sell.
And even if the vendor managed to extract a very full value for the land (which I expect he/she did given the circumstances), it is still way better result than than the alternative and I think it removes a major investment obstacle for many.
I think there could be as much as a $25m capital outlay difference between going down the start-again-from-first-principles way and the brownfield expansion path.
And $25m is a big number in the context of the current market cap of the company.
Makes the difference between being able to fund the expansion internally and having to seek recourse to shareholders for the funds.
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SDI Price at posting:
87.5¢ Sentiment: None Disclosure: Held
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