Based on risk return, I think there is relatively less risk of the price plunging. There are better chances of a price surge. Here are my reasons.
- First case is the takeover bid price is higher than bid price, in which case there is only upside, hence no risk.
- The next case is that AIO gets good value for some of its assets and it can then pay off all of its of its debt.
- In the worst case, the takeover offer is less than current SP. The credit crisis is nearly gone. AIO will reject the offer and look for equity partner, rights issue extension of debt, etc. In such a case the price will fall on announcement, but there will be significant gain for long term holders.
I can only see upside, althugh you never know.
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AIO Price at posting:
$1.32 Sentiment: Buy Disclosure: Held
