re: Ann: Target's Statement in response t... I tend to agree, so...

re: Ann: Target's Statement in response t... I tend to agree, so it comes down to how long you want to wait, and what other opportunities may pass you by.

It is obvious it is worth more than what is being offered currently, but consider this;

1) Xingang have control >20%. Big hurdle to jump for another interested party. The other Chinese parties wont take the offer, but hand control to Xingang. Pretty clear these Chinese parties are working together to grab control so that the ultimate deal will be with their countrymen. IMO. Obviously any subsequent deals will be greater than 33c!

2) Magnetite Range is limited in its exploration potential. Clearly it doesn't warrant putting more holes down and ACS have done the maximum logical amount of work to on-sell.
MR doesn't warrant development on its own. It might be next door to Extension Hill, but that deposit is already 1.7Bt with a potential total of 6Bt and their other projects in the region may have a further 1Bt.
That means they can hold out on touching Magnetite Range for ever and a day as far as current shareholders are concerned.
It may be in a great location, but the leases ACS own themselves dont have the scale required to self start and therefore they are not considered a threat.

3) The valuations. These were clearly outlined in the Target Statement and clear reasons were given. The trading range provided the highest valuation but is also the most unreliable. There was a particular broker spruiking much higher prices to come yet the selling continued, probably by those who knew the offer would actually be much less.

The peer comparisons managed to find a cheaper deal with the Taifend bid for Ferrowests Yogi. It did however have to heavily discount by 60% the valuation compared to CCM's investment in Asia Iron's Extension Hill. That was probably too heavy IMO. They cited the troubled Oakajee as one reason, but really I see other reasons and the main one is the lack of scale.


If ACS had their own clear path to production the valuation would be a lot higher.

Certainly more riskier plays out there, so it all depends on your investment style. I don't see a lot of harm in waiting if it suits your style, but how long the wait will be is anyone's guess. The years go by pretty quick.

Ill keep watching to see what transpires.