Olam TO has always been bubbling away in the back ground, as you point out it fits with their strategy of moving along the value chain(not to be passive farmers).
So nice transition, rather than what is holding SHV back, but what is good about SHV. Some of my thought not in any particular order.
A. * What is it worth to Olam to bring the mgt contracts in house? Lets guess that $10 mil say of EBIT is Olam contracts. So $70-$100 mil?
* What are the SHV own orchards worth? 13,000 acres at the $13k/arce they just paid gives: $169 mil
* Then value added (Lucky) business EBIT $3.5 mil 1H (say $7 mil FY) apply a multiple gives: $50 - $70 mil
Total $289 - $339 mil Vs. current MC of $170 mil (approx $230 mil EV), so a conservative up side of 25% - 50% (then throw in a TO premium??? you get an even bigger number)
B. I see that earnings per share forecasts on commsec have lifted EPS from 46 cents to 52 cents in the past wee,
C. Growth, growth, growth. (Acreage, Maturing trees (yield), More almonds to manage/process, population growth (more value added consumers), etc.)
SHV Price at posting:
$3.08 Sentiment: Buy Disclosure: Held
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(20min delay)