The BSE discount to TO offer and EF's drop post offer are both...

The BSE discount to TO offer and EF's drop post offer are both expected, as some others have said. In the simplest terms, the acquirer nearly always takes a hit because the market is nervous they have overpaid and a lot of sellers will hit the stock once script is swapped into the TO implementation. The target has many sellers taking profits to invest elsewhere, not worried about leaving a bit on the table and/or worried about the Scheme being blocked by regulators or vote etc.

In more detail, EF is buying a 5 year stymied African resource play (read Sovereign Risk) in a sector most have never heard of (mineral sands) with a large price tag to develop. Further, given the large discount between buying EF stock on NASDAQ vs buying EF via BSE on ASX (post divi after tax) the arbitrage profit for existing EF holders to simply sell EF and buy BSE, pocketing 10% @ 23c, 20% @ 21c BSE etc would be irrestistable and probably explains both the EF selling and volumes of BSE buyers... I assume not a lot of aussies are really buying BSE this early for EF exposure after the horse bolted +100% in the offer.

This arbitrage swap of EF for BSE is EF share price negative and self-fulfilling (no reason to buy EF heads, just buy BSE) and BSE supportive, but only to a max of 5% I would have thought, given the time-market risk until end August etc. BSE sold Toliara cheaply, in fact holders only get back the cash invested into Toliara since 2017, but that also points to EF getting a bargain given inflation and the vlaue-add since (especially monazite obviously). In time I think EF will do very well out of this deal, and thus BSE shareholders who want to hang on for the exposure and EF's desire to create anothe rare ex-China mine-to-magnet vertical integrated producer.

GLTAH