Based on the data above, I feel a merger would benefit the execs as they have had to buy shares above the current market cap in the previous CRs. A TO at a low price wouldnt make sense as it would hurt them. A merger in my opinion, is a completely different story. A merger will help us in the following ways:
1) Larger market share - Merging with a company like BHP/RIO/Fortescue who are the kings of low grade hematite will give us access to their market share. Yummy.
2) Access to industry talent - Able to leverage existing talent and reprioritize their expertise to get our mine up and running is key to getting us into production (derisking exercise)
3) Explore new markets - A merger with a company like Nippon/BHP/RIO would give us access to their clients/customers/networks. Slurp.
4) Lower costs, increased profit - If we merged say with BHP or SIMEC, we are able to leverage their operational technology/fleet/expertise. I know from experience that these companies have their own tech that has been tried/tested over 20+ years. Why create a new system when you can leverage their maturity/automation capabilities = lower OPEX.
5) Favorable Taxes - Ooh this one here, is a biggie = tax reductions = higher profit. Companies like Fortescue is good at this i.e. Mindaroo (charitable org to lower taxes)
6) Cornering Future Value - Based on where supply/demand is head I reckon this is something a merger would definitely benefit from MGT. Shortage of 230m tons of high grade ore in 230 leads to big premiums > profit.
7) Denying rivals - Fortescue said that China wants 100mpta of high grade ore but they dont have the hydrogen/deposit to realise that dream. Ironbridge is 20mtpa + their south africa **on is unreliable due to geo political risks. A company like RIO/BHP could easily stiffle Fortescue's efforts if they merged with us.
I cant see a logical reason as to why mgmt. would want to accept a takeover/tender offer based on our current price and if so, I will be the first one to say no if the offer price is lower than $2. It wouldn't make any sense whatsoever based on the projected demand/supply shortage in 2030.
I am definitely leaning towards a merger/partnership and NOT a TO. But I guess time will tell. I do feel that we are in for a good christmas in 2024
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