MDL mineral deposits limited

Ann: Release of Target's Statement in respect of Eramet's Offer, page-7

  1. VYR
    4,896 Posts.
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    They don't seem to be too bullish or bearish on production volumes and commodity prices.

    I would agree that Eramet should be happy on those fronts.

    The thing that delivers the high valuation numbers though is the discount rate

    When you take the 2.5% inflation component out of the discount rates the passing yields seem a bit skinny when TIZIR had to, and are, paying 9% for first call secured debt.
    6.5 % yield for the high number doesn't seem realistic
    and 8.5% yield on the $2.04 isn't a kings ransom even if they can source debt at 5.4%

    We will soon know what ERAMETS response is. I'm pretty sure they won't be embracing the idea of paying an extra $200M

    Lets hope they can be pushed up a fair bet. Its worth a lot more to them as a wholly owned deal than it is as a majority owned partner. Of course its worth a lot more to them either way than it is to anyone else.

    Now that the MDL board have fired all their ammunition and set a fair range, my money is on ERAMET offering more with a 90% full ownership condition.
 
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