Well, like some, I have found these threads to be full of... quite varied discussion.
Not even much discussion around the way the deal is structured (at least as I understand it). I struggle to care about the number of shares (NST shareholders don't seem to care even though a lot were printing to get SARs assets). Even the synergies are not overly important, I mean... what synergies do EVNs assets all over the world have..?
My initial thought was to why RED is making the move on SLR (well.. sort of), is perhaps to assist blunting any potential move by GMD (SLR holders vote). Also, some seem very upset about SLRs acquisition of the RED shares. But if SLR had not done so, they would have had no blocking stake against a move by GMD for example. Also, SLR had the cash sitting there and it's an opportunity cost (other than a bit of interest being missed). Plus, if the deal goes ahead means the RED shares purchased if... nulled, was a sort of share buyback, which is a good thing considering how many shares REDs management printed in the last few years.
There are lots of pro's and cons for both companies, so... I do think that when 'joined together', they become something more (balance). I can keep it simple, because, you can dig into the numbers and go round in circles arguing $$ forever. The big end of town will be happy enough because there will be a re-rate, there will be reduced risk and the future cashflow graphs are going to look very nice (much better than the likes of RRL which still has a huge capex bill to pay in the years ahead if it builds McPhil).
RED - single asset, peak production in the near term until they undertake further expansion on the plant, and... Darlot is not guaranteed to continue past 2-3 years (oh, and a crap hedge) and debt. SLR - multiple assets, mixed costs, mixed life but has Suger Zone as a growth project and no valued attributed to it and little to no hedging. Lots of cash, no debt.
As for management, neither SLR or RED have proven themselves... exemplar, but perhaps a joined team will have a better chance at giving the likes of CMM and EMR a run for their money?
I think the two respective share prices are finding a sort of equilibrium, though I look forward to others thoughts on the exact figures, because it is of course interesting to understand what... on paper they are valued at.
Good luck to all holders (perhaps fellow shareholders later in the year).
SLR Price at posting:
$1.12 Sentiment: Hold Disclosure: Not Held
