I've now read some 20 odd articles, 5 leading broker reports on the CML M&A action, plus the FIRB dribble on HC.
I can see an off market takeover by the KKR consortium being launched somewhere between A$14.50 to A$15.00 (taking account of comparable transactions and LBO metrics and PE IRR requirements), subject to:
(1) Unanimous Board Approval (notwithstanding a more attractive gazumping offer) (2) Break Fee of ~A$20m (3) Limited Due Diligence
Given upside to the current SP of ~10%, yet downside of (say ~15% - still above fundamental value), one could argue (everything being equal) that the risk is on the downside for this trade...
I don't think anything will happen for at least another week, just more speculation on price and identity.
I think I am going to short this stock for the next 3-5 days.
Views?
CML Price at posting:
0.0¢ Sentiment: Sell Disclosure: Held
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