Hi Crusty
No, but Collins St is one of my heroes!!! His musings were always a delight to read, and so, so accurate.
I am just a retired ex wine industry guy who loves the investment scene and believes the Lithium sector is about to do for our economy what the iron ore sector did back in the heady days. I'm pretty disappointed that this TO offer has landed now, but we always knew it was a distinct possibility. Every asset is for sale, and KDR is no exception. The fair sale PRICE is what I am looking for here, and the price on offer is just not reasonable. I raised what I consider a relevant point to the Chairman at the AGM, and that is that SQM has just paid US$80 million into Covalent, plus US$20M into the account of KDR. Even at the end of June, KDR is predicted to have around $13M in the bank, and Covalent would be around US$70M (US$35M KDR asset). Add the gold assets (speculated at $0.30 per share, and fully owned by KDR), and converting the US$ to AUS$ (because WES is offering $AUD here, not US$), and the $1.90 per share is reduced by approx $0.16 per share for KDR's "money in the bank already", plus the $0.30 per share for the gold assets which WES could sell off. The effective offer price, I believe, is in the vicinity of $1.90 - ($0.16 + $0.30) = $1.44 per share. Now if you think $1.44 per share is a fair and reasonable TO offer, then I will quit this game!!!!
To be fair, part of the sale price is due to KDR management not diluting along the way (you could argue that they did dilute by forming the JV with SQM) and thereby keeping the share price high, so well done them. The board has always stated they wanted to fund everything with minimum or no dilution, and the shares on issue reflect this, so they now have the ammunition to get us shareholders the FAIR value we deserve by investing in this tier 1, world significant, highly desirable asset. I just don't believe that there are no other resource companies out there that wouldn't be interested in KDR, so I am still confident we will see another bid (if not more that one). As for the blocking statement by SQM that they won't deal with any other company than WES, I call BS!!!!. I am not sure how ASIC would view this from a competition perspective, but we will see.
So, fellow investors, the ball is in our court. Do we want to take an effective offer of $1.44 per share from WES?. I know we would get $1.90, but it is offset quite dramatically by the assets that WES would scoop up at no charge to them. Think about it and vote NO.
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