I hold both PRU & ORR. Zero incentive for PRU to bid? Why? They want ORR, that's obvious & they have tension in bidding thru' SVM. When PRU announced their bid it was at a cash equivalency to SVM's combined cash & script. That's history with SVM's share price escalation that allows the ORR BoD to highlight the discrepancy between the offers. The pricing tension arrived by virtue of SVM's script being slowly re-rated.
I beg to differ on PRU having the benefit of waiting & neither SVM for that matter. In the short term yes they can but in the medium they have a sizeable production hole they need to fill. PRU have already gone down the acquisition path to purchase a project that is for geopolitical/risk reasons now currently on ice. They need something & soon & so do SVM. On SVM walking in any haste, I wouldn't be too sure. What are their organic growth options? They've already walked away from paying over the odds for CLA. Do it again with ORR & i can't see too many target companies in the future being interested in engaging with them. Silvercorp have some mature assets as you well know. They're not out there trying to buy assets and park them on a shelf. Both PRU & SVM arguably need a project that gets into production in the next 24-30 months.
I see it playing out differently to you & you may well be right but i think PRU will bid this at least once more esp if the SVM share price keeps re-rating. Happy to see where it goes. Thanks for an alternative viewpoint
ORR Price at posting:
58.0¢ Sentiment: Buy Disclosure: Held
