The deal has been done at $3.20. Yes, they did lower the price in September, but that was before the deal was done.The SIA was signed on Sep 22nd.
PSP has spent time and money, lots of it, on this deal including lodging the Scheme Booklet with ASIC.If PSP intend walking, why go to this expense. The key to yesterday’s announcement was this fact.
PSP can’t now walk away easily. There is always risk, but it is now very low.One of the Conditions would have to be triggered and PSP would want to not waiver the Condition.
The profit downgrade is useful in that it will convince more shareholders to vote in favour.
The share price got to nearly $8.00 a few years ago.Now they are getting CGC for a bit more than the IPO price, with years of growth and capex.
Note that some brokers/commentators think the profit downgrade could allow PSP to lower the price again.But if the profit downgrade or NTA reduction comes from events out of CGC’s control like flood, fire, storm, commodity prices, etc, then PSP cannot walk away.
There would need to be some company Specific Event in the next 8 weeks which causes financial loss.This risk is low, so I bought a lot at $2.96 yesterday. Nearly an 8% return, which is over 40%pa.This risk/return profile rarely comes up.
