Good question. I think that the uncertainty around McPhils will prevent any takeover in the near term. The risk for an acquirer is that the share price snaps back after that uncertainty is resolved and they miss their window. It will interesting to see if anyone is prepared to roll the dice prior to approvals.
Sub $2, the company should start purchasing its own stock with any excess capital rather than pay additional dividends. Some closer to retirement might disagree with that but to be perfectly honest they should look at other sectors for dividend stability.
Alternatively, the company continues to stock pile excess capital for an acquisition. The juniors will also get caught up in the taper tantrum (at least temporarily), which may throw up some opportunities. I'm a firm believer that many of the pre producers may never see production on their own, particularly if MCQ and other sell side research are correct about their 2-3 year gold forecasts. Some of these, in my opinion, are fully priced at present.
RRL Price at posting:
$2.06 Sentiment: Buy Disclosure: Held
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