It never ceases to amaze me how some people would rather hang their hat on something that appears negative rather than take a positive view of what is really happening, not sure if you would call that a glass half empty view? but these people must live in fear all the time.
I don't believe what polyplaya has said is something that will occur, it doesn't stand the acid test IMHO?
I got an email from another poster who I talk with sometimes, he was asking me how I viewed this possible takeover idea, I said to him that I wasn't going to lose sleep over something that I could change or may not even happen maybe.
That email did get me thinking more about that issue though, I came to the conclusion that the possibility a low ball offer was just codswallop.
Lets try and look at this logically for a start, some clear thinking or common sense would be a good starting point, not that common sense is very common these days.
Lets put a few things into perspective here, for instance lets just say that a hostile takeover bid was ever made, how long do you think that process would take from woe to go? it could for instance be more than two months and possibly as long as six months or more?
There is every chance that the decision for Paducah would have to be made before any offer was settled and perhaps even Wilmington as well?
But if the offer was in fact made, then that itself tells you that they are going ahead with one or the other or both?
But lets dig a little deeper, who would or even could make an offer, the only answer to that is GE because up until they either make an offer or release the information that they are going ahead with either Paducah or Wilmington OR both, then the the Share Price is a moot point, because as soon as they made an offer, the Share Price would rise and quite dramatically I believe? because it is at that point that the possibility of receiving a royalty of somewhere between 7% and 12% reality and also one that is vastly different as well to other royalty streams, because this one doesn't have a sunset, it isn't tied to Patented IP, it has been placed under the top secret blanket, this is the only time in history that this has happened for a private company, this is what makes this particular royalty stream so attractive.
Even if another system was developed that could be just as good as the Silex system or maybe even better it slightly better? everyone knows that the first to market usually wins, until something vastly better comes along, it would have to be better by some margin because by the time any newer technology was proven and finally got to market it would be ten years behind, would the cost of building a marginally better system be worth spending billions to replace one that was good in it's own right? maybe nuclear fusion is coming? but it will take many years before that happens in my opinion.
But here comes the rub, if GE ever made a bid for Silex , then it is at that point that every other company in the world knows that the royalty train is a reality, for instance what would stop AREVA from making a bid? or maybe someone like BHP as an aside to their Uranium operations? or even a company like Macquarie Infrastructure Group perhaps?
I just know somebody or some government would say, hey hang on a minute! you can't sell it to them, due to national security reasons with respect to proliferation?
Well, that in the end would mean that there is only one possible bidder ever, and that could only be GE, it could mean that others are banned from bidding?
Now if that were the case and a low ball figure was offered, when the whole world knows what the real value would be, well that in my opinion would be tantamount to Insider Trading and litigation would follow immediately after such an low offer to buy Silex was tabled.
So if GE were to make an offer? it would have to be commensurate with the true value that lies behind the technology i.e. it would have to be some multiple of the percentage royalty multiplied by the prospective number of future plants multiplied by X number of years, that figure would be quite substantial I believe, if the offer was fair then it is possible that it could be done, but only if it was fair?
GE would be mainly interested in the Uranium Enrichment side you would think? so if they wanted all of Silex then they would also have to stump up for that as well, a figure which by then could also be substantial?
But the biggest stumbling block against GE getting control for a small sum is the number of Inside people holding shares in Silex, I reckon it could be somewhere near 40% or even more and then there are all of the mum and dads just like us, who also to vote, not that we could sway it one way or another, but added to the insiders it would have to count for something.
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