The BRZ restructure and unbundling of non core assets is a clear...

The BRZ restructure and unbundling of non core assets is a clear sign the remaining primary listed entity is open to offers. However, given the share price has collapsed over the past few months and trades at a discount to LPI and a substantial discount to the implied MSB valuation of LPI’s recent purchase, a take over by a 3rd party seems unlikely. The share price would be running. At a A$150m valuation for MSB, BRZ would be a seller to LPI IMO. The BRZ directors have been buyers in recent times and issued themselves options so that’s encouraging. LPI is in a position to offer BRZ a friendly merger that would see a 25%~30% increase in valuation for BRZ shareholders and further upside when an external partner is found. Plus they would become shareholders in the more liquid majority JV partner instead of remaining in an illiquid minority partner. Selling now to an outsider, even at a A$150m valuation, would mean leaving a lot on the table as there are plenty of project milestones still to be achieved. If BRZ shareholders believe in MSB they would want to remain exposed to the project and retain pure exposure to the future upside.

Either way my point was BRZ appears cheap when doing a relative valuation against LPI or on an absolute basis against the recent JV share purchase by LPI at a A$150m valuation. At that valuation BRZ is worth ~48c per share.

Let’s see what happens next. GLTA