Valuations are definitely not my forte but when China Mengniu...

Valuations are definitely not my forte but when China Mengniu took over Bellamy's back in 2019, they offered a 59% premium to the SP at the time. I am sure there would be other more recent takeover examples to go by though.

Bellamy's was pre-Covid so the IF market, daigou etc was still booming, birth rate declines were not biting yet. Current market conditions are very different and would have to factor into any premium a bidder is going to put on growth potential.

But A2 is an exceptional company in a lot of areas and would warrant an exceptional premium IMO. Consider the strength of the branding, its pioneer status in the category, the market share it has gained in China, the exclusive A2 milk supply it has built, its manufacturing assets, strategic stake in Synlait, massive cash balance. Also A2M's integration with various Chinese state-owned partners.

It's hard to put a value on all that. You would think that at the very minimum warrants a similar premium as Bellamy's (which would equate to roughly AUD $10 per share). I think management would probably reject something around that mark though. Back in 2015 A2M rejected a confidential informal takeover offer from Freedom Foods which turned out to massively undervalue what the company ultimately became. I am guessing they would be cautious again and it would take something more like 100-150% premium ($12-15 per share) to consider.

All IMO and of course complete speculation on my part.