takeover re-rating

Think it is time for some realism, rather than platitudes in looking at the CRE takeover.

Would say the market has already rated FML in relation to the CRE takeover situation and decided that strategic control of CRE does not warrant an upwards tick, especially as CRE has a hostile shareholder with a 12 to 15% stake in the company.

As things stand, expect to see any positive announcements by CRE being discounted in their application to FML, whereas a negative announcement by CRE will be fully applied to FML without a discount.

The forward valuation of CRE will become increasingly difficult due to the illiquid nature and limited number of shares available for trading, with this having a flow on effect to the FML share price (more likely to be negative, rather than positive).

The decisive FML action need to move CRE forward will, in a strategic control situation, be continually hampered by the need to refer matters to either, or both, the CRE Board and shareholder meetings, resulting in progress slowing to a crawl.

In my opinion, the only way FML is going to achieve an upwards re-rating for the CRE takeover is if it has full control, and it is now a question of whether FML will impose the necessary sanctions to achieve this.