Reasons that CHAMP sale will go ahead: 1. This is an excellent deal for CHAMP with upside over 100%. 2. CHAMP's whole business is around making these kinds of aquisitions. They raised money in 2005 and they've waited patiently until the end of 2008 to put some of it to work. Their business is buying at the bottom. 3. CHAMP's reputation is on the line and their investors aren't going to look to favorably if they look like they can no longer secure finance. 4. Allco desperately needs this to happen and would have made some evaluation of CHAMP's ability to finance (albeit before the depths of the current crisis.
Reasons Against: 5. The economic situation has changed so much that CHAMP will use finance as an excuse not to close 6. CHAMP will really try to get finance but will not be able to
What are the other reasons against?
In terms of 5 - I don't believe the economic situation has changed that much in 4 weeks AND CHAMP have already mitigated this with all the potential holdbacks
In terms of 6 - I don't believe the world has come to an end. It's become very hard to get finance but it's impossible.
AFG Price at posting:
8.9¢ Sentiment: None Disclosure: Held
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