ORI | TAKEOVER TARGET

Does anyone have any thoughts on the appeal of Orica as a target for either an industry participant or private equity (especially with Australian Super owning a cornerstone stake and their predilection for turning these stakes into bidding assets as part of a co-investment strategy with PE Bidders?

The market position and industry dynamics seem pretty favourable to me:

1. They have a strong position in an already consolidated market.

2. It's a crucial industrial component of the real asset economy, serving a vital part of its customer's operations.

3. Seems to have been pretty poorly run by the usual ASX combination of overpaid and underperforming Board/Executive team.

4. Coal exposure appears to have provided an overhang on the valuation, and possibly ESG related selling.

5. Financing seems as though it could well be optimised by a sharp operator.

6. Sounds like pricing strategies have been deleterious, and opex heavy (esp new SAP system), which is typically bread and butter for a PE bidder as ostensibly you're up paying for bottom-ish cycle earnings, which helps the Board acquiesce and recommend a takeover or existing shareholders selling into a bid as they are fed up with the Board/Exec apathy.