I have sold ALL my FLX holdings as I see little risk adjusted upside based on what I believe are likely outcomes.
Whilst I think that the deal undervalues the company I think that there is a high chance that it will proceed.
If this happens there is only about 1% further upside from the current price as the final dividend has already traded ex.
I have bought FLX well so I am more than happy forgo the further 1% capital upside in return for 100% certainty and the cash in my bank account.
If the deal does not go ahead I would imagine that FLX would fall at least 10% - 15% to reflect its near term earnings and the fact that it does not have any take over premium.
If this happens I will definitely be buying back in as I think that it is a well run company with strong assets.
If Yanzhou does raise its offer, I would be surprised it it increased by any more than the upper range of the independent offer which is about a further $0.60 per share.
Good luck to all.
FLX Price at posting:
$16.83 Sentiment: Sell Disclosure: Not Held
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