I would guess this will be a script deal to conserve MEP's cash.
Given that Breakaway has been trading around $0.0012 over the last 3 months (and down to $0.006 recently), 5:1 would effectively be a 100% premium.
BRW has 435m shares on issue vs 108m for MEP. An acquisition ratio of 5:1 is equivalent to 2.4c for BRW (MEP at 12c), implying a a market cap of $10.4m for BRW vs $13m for MEP.
However MEP's EV is almost zero (taking into account the cash and value of list investments held) - ie no value is attributed to its project portfolio (even though it sold just two former projects for $16m over the last year or so).
On the other hand, BRW has almost no cash, so its value is all in the tenements and projects. As an MEP share holder I hope they are damn good!
BRW Price at posting:
1.4¢ Sentiment: None Disclosure: Not Held
