In my view the SLR announcement would have been easier to understand if the showed the reciprocal sale/takeover ratio as detailed below;
1) Full Purchase (both tranches) - 1 SLR share for each 12.2731 PRH shares held - At the current PRH price of 17.5c represents an effective purchase price for one SLR share at $2.15 or a 30.6% discount to a $3.10 SLR share price. - Use this ration (1;12.2731) to work out live arbitrage results from time to time (Risk is only one tranche or zero sales occur).
2) Only Non Trilogy Assets sold. - 1 SLR share for each 21.865092 PRH shares held - At the current PRH price of 17.5c represents an effective purchase price for one SLR share at $3.83 or a 23.5% premium to a $3.10 SLR share price.
IMPORTANT NOTES.
a) Under point 2) PRH will still fully own the Trilogy Assets and SLR will convert borrowings up to $1.8m into shares at 11c (maximum dilution equals 20%).
b) Under a) above PRH will still trade and at an SLR price of $3.10 an original PRH share at 17.5c could trade at 3.34c and you would be indifferent from a then point in time value perspective.
Risks
1) No SLR sales occur with no "White Knight" taking its place.
2) SLR's share price falls below;
a) $2.15 after a 2 Tranche Sale b) The market trash's PRH to sub 3.4c after circa half its assets are sold.
Food for thought.
In my view action needs to occur ASAP (being find a White Knight or Approving the Sale Process - letting SLR to battle with LN Metals.
PRH Price at posting:
1.5¢ Sentiment: None Disclosure: Held
