ADT (ASX) Possible Scenarios

Originally posted by retrac: ↑

Thought I would start a new thread to explore some different scenarios in the event of a possible TO. I think it is a good exercise as it may help shareholders to determine their best course of action should a TO materialise. I look forward to others contributions as I am personally trying to map out my own investment path going forward. A TO may never come but there is no cost in thinking about it.

Obviously ones own personal factors are involved here like age, investment size and proportion of wealth, beliefs on macro factors etc. These sort of factors need to be assed by the individual in any decision process.

My impression is that a TO offer is coming from SFR in the not too distant future. This is based on the fact that I have heard from reliable sources that they indeed seek to own ADT, the de risking process of ADT is almost done, they are the largest single shareholder, have seem to have buddied up with Milos (founder and significant shareholder) and there has been significant efforts employed to cap the stock price over recent days despite the significant expected positive news flow. This is speculation on my part however it is an insight into why I think this discussion is relevant. Others may add other reasons for and against a TO by SFR.

If SFR make an offer then it is safe to say that they are going to want to pay as little as possible and the caping of the stock in recent times is possibly indicative of this. It is also just good economics for them and their shareholders. Consequently we are not going to see a great offer from SFR, they will likely throw a lowball offer at ADT shareholders. This offer will almost certainly be a cash and script consideration, not the most attractive scenario for most holders in ADT.

There are several scenarios to consider here;

1. This will be done so they can begin to buy on market. Many shareholders will sell into an initial TO offer at a significantly higher SP that eventuates, possibly 40% on current SP. This gives SFR the opportunity to buy a considerable percentage on market, further strengthening their position at their low ball offer. If there is another suitor hiding in the wings then they would likely buy into this announcement too.

2. Assuming a low ball offer ADT significant holders and management/BOD will reject the offer.

3. Upon rejection of the offer we can expect to see a higher offer from SFR, especially knowing that they probably never expected to get ADT for their first initial offer but have used this initial offer to suck in a lot of holders and buy their shares on the cheap. The capping of the SP is indicative of such a strategy. Current ADT shareholders need to understand this imo and not be too fast to sell their shares on the cheap.

4. At some stage we can expect to see another suitor, should there be one, to make a counter offer superior to SFR's offer. Companies like ADT with world class projects, first mover advantage and significant land holdings do not come along every day. Ideally a bidding war may ensue! The point here again is it is prudent to be patient and allow the process to unfold, the first offer is not likely to be the best offer.

5. Should SFR be the only bidder then they are going to have to up their bid to a point where they ultimately gain 50% of ADT and consequently gain control and or gain the support of major shareholders/BOD. Without the support of significant shareholders they could still gain control of the company but not be able to achieve a full takeover, that is 90% and the remaining 10% get amalgamated into the new entity wether thy like it or not.

There may also be some aspects of being a UK company that effects take-over conditions that Im not aware of.

Should a TO offer be made then we should also start to get a more realistic price discovery for Adriatic on the back of an SP re rate.

Other factors that come to mind are; Does PC want to continue on and take Adriatic through to becoming a producer or is he happy at the right price to take a considerable payout and move onto other exploration projects in the future. What other companies are watching Adriatic with the aim of buying ADT? Is SFR big enough to reel in a fish like ADT, they have a head start on ownership but is this enough? Has PC got something up his sleeve, like exploration results that could re rate Adriatic's value? What value will the DFS put on Adriatic? Will financing be announced sooner rather than later? And the list goes on.....so many things to consider.

As I stated this is all speculation and just an investigation of different scenarios and considerations. Would love to hear others thoughts on what may eventuate. My crystal ball says is SFR offer of $4 cash and script => rejected by board => bidding war ensues as other larger bidders make an offer => ADT eventually taken out at approximately $7 and SFR lose out but walk away with a large cash position to buy something else. The $7 may be cash and script so a decision to be made for holders wether to sell prior to close of trading or take script in new owner.

I have a lot riding on this company and a good result in a TO will be life changing.

GLTA

Expand

Just thought I would re visit this post now that the game has changed imo.

I cant see SFR having a crack at ADT now that they have made a significant buyout elsewhere. They have shown their hand. We can only speculate on the decision making process here for SFR however imo they have been unable or unwilling to pay the perceived price for ADT. Consequently their investment in ADT, which has been very kind to them, gives them the ability to walk away with a good sum of money in the event of a TO from another party or a good stake in an asset going forward which will print money.

Plenty of interest today, are we going to get an offer from elsewhere or is this on the back of funding to build a mine? Either way I like the buying! GLTA

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Last $4.10		Change 0.040(0.99%)		Mkt cap ! $1.063B

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Last updated 15.59pm 31/05/2024 ?

Possible Scenarios, page-120

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