Lion Selection (LST.AX) is trading again after their flurry of deals promising a NAV of $2.05+ and a cash payback to shareholders of $1.35 a share. It is now trading at about $1.80 still well below NAV regardless of the outcome of this shambles.
Indophil's hostile all script offer for LST.AX of 2.5 IRN for each LST is still open, and with IRN.AX trading at $1.12 is worth, on paper $2.80 a share for LST holders.
But, LST owns around 25% of IRN which it has offered to Xtrata at $1 a share, the same price that Xstrata proposed in its all cash hostile bid for Indophil!
But, that bid is conditional on the IRN bid for LST not proceeding. Before Xtrata's bid IRN was trading in the 60 to 70 cent range, and could easily fall back there if Xstrata pulls out!
What to do? This situation has arisen because all of the juniors are so clearly undervalued that Xstrata saw their chance to take out their junior partner (IRN) in their soon to be completed gold/copper mine in the Philippines for a bargain price. Not only was IRN clearly undervalued but LST which owned 25% of IRN was even more undervalued trading well below their NAV.
I expect to see a lot more of these hostile attempts as well as some side deals to fend them off until the juniors get back to some approximation of their real value.
LST Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
