A2M

1.69%

$6.99 the a2 milk company limited

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Investbest92

1,022 Posts.

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25/06/24

11:03

Post #: 74475028
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Originally posted by werdplaya58: ↑

What are you talking about?

A2M has more leverage in this situation. Synlait needs A2M's vote or they are going to cease trading:

"If the $130 million payment is not made and the banks do not agree to alternative arrangements, the Board believes Synlait will need to cease trading or initiate a formal insolvency process."

At the very least, Synlait need to drop any and all objection to A2M's termination of exclusive supply rights. It's beyond the point of absurdity for Synlait to be in arbitration dispute with A2M about this while simultaneously requiring A2M's support to continue to exist. Synlait really need to stop kidding themselves.

To the broader point about leverage. People always seem to imply that the A2M-Synlait relationship is one of equal co-dependency, and conversely, mutually assured destruction. But that is not entirely true. Without A2M, Synlait is nothing. But even in a worst case scenario, without Synlait, A2M would take a huge hit but continue operating and eventually recover.

Dare I say it, there may even be a scenario where A2M allow Synlait to go insolvent in order to bring the whole situation to a head. Insolvency would force the various takeover scenarios that have been endlessly discussed on here to a head. As well as opening up Synlait's assets, including Dunsandel that A2M wants, to possible acquisition.

And here's the kicker. At the end of the day, whoever ends up owning and operating Dunsandel - whether it is Synlait, Bright, A2 Milk, administrators, China Mengniu, Nestle, etc. - for WHOEVER it is, it will continue to make a lot of financial sense for them to retain the facility's main customer, A2M, at least for the remainder of the current SAMR license period, as the SAMR registration is tied to the A2 Platinum product, and this is what ultimately gives the asset a large chunk of its value.

So really, who do you think has more leverage?

Expand

Admittedly i misread the report Plus saw the input on the NZ forum from certain posters who think a2 is at disadvantage.. (Balance is a clown) Happens when early in the morning.

Sounds like a2 should let go into insolvency.

Last edited by Investbest92: 25/06/24

A2M Price at posting: $6.55 Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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(20min delay)
Last $6.99		Change -0.120(1.69%)		Mkt cap ! $5.053B

Open	High	Low	Value	Volume
$7.00	$7.07	$6.96	$10.80M	1.545M

Buyers (Bids)

No.	Vol.	Price($)
5	13394	$6.95

Sellers (Offers)

Price($)	Vol.	No.
$6.99	4946	2

View Market Depth

No.	Vol.	Price($)
1	1658	6.950
1	144	6.910
2	301	6.850
1	10000	6.810
5	5678	6.800

Price($)	Vol.	No.
7.000	2777	2
7.080	3000	1
7.100	2044	2
7.120	2248	2
7.130	250	1

Last trade - 16.10pm 02/08/2024 (20 minute delay)

A2M (ASX) Chart

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