baycorp sale

There have been a few press reports about the valuation of baycorp in light of credit corps recent results (links below).

I looked at the comparables and it seems reasonable to get to 71c per OCP share for baycorp based on CCP's 1.14 times EBITDA with baycorp's short term growth factored in. They may get more than that if there is a strategic buyer (i.e. fool) waiting in the wings.

Adding signature at book and ISF at market you get about 1.95 for OCP. Certainly OCP hopes to get more than book for signature, though who knows what's going on with ISF!!!

Even with the disaster that is ISF, OCP has been a good investment. Few could have lost money over the last year or two factoring in the distributions.

If signature is sold for 1.5 times book, ISF for closer to 40c per ISF along with this baycorp sale then OCP is worth closer to $2.75! None of these assumptions are a huge stretch.

Of course what matters today is that OCP is trading at a discount to either scenario.

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A couple of articles on baycorp and OCP.

http://www.businessspectator.com.au/bs.nsf/Article/bhp-billiton-potash-corp-fertiliser-takeover-bid-o-pd20100818-8ESEV?OpenDocument&src=sph

http://www.brisbanetimes.com.au/business/pathological-cuts-a-headache-for-healthcare-sector-20100817-128hz.html