First to assume a takeover of $1B does not make sense at this time. A take over of a billion would only net 14C a share. I doubt they would get any stock holders to approve that.
Second you don't look at Lynas in a vacuum to decide what Lynas is worth. You look at other activity in the market. MCP Mt pass just sold for a ridiculously low price. Ucore after searching for over a year for financing or a partner just sold all its pilot production line for US$2 M. The old GWM Sten Mine has been looking for a partner or purchaser for several years, nothing and it is richest mine in the world. There are many opportunities available to get into REE right now. Purchase price probably less than 10 M. Then invest less than 500M a few years and you are in business. In spite of these deals available there is ZERO interest. I am not saying Lynas is not worth a Billion $. Just that there does not seem to be any buyer interest out there for REE resources undeveloped or developed. For a Sale you need a buyer.
Lynas was clearly in finantial trouble in 2015. The quick refi in May of 16 was just a stop gap. I am sure besides negociating with Jare and Mt K they were activly searching for a new source of cash. They came up empty and had to dilute the stock holders to stay in buisness. I believe MT K's deal tells us allot about interest in Lynas a year ago. IF you have real data it is better now I am all ears.
Even $2B would only net 28C a share I think some stock holders would have a hard time with that price . No buyer wants to start something that in the end, rings up no sale.
I want to reemphasis that this is not about Lynas’s value or value compared to others. It is about the lack of market for REE resources in general. IF you want to sell your house and the real-estate market in general is way down, you have two choices sell for a low price or wait for market to improve. Recent REE Price increases should cause the market for REE resources to improve considerably, it will take time. Ucore was July 30th 2017 MCP was just months before that. Neither had any major bidders. Sten is available today.
You want to sell somthing you have to take a good look at what the buyer sees not what you think it is worth. Right now buyers see lots of things on market with little activity. A market that is still controlled by Chinna . A market that many of the major purchasere have alternatives to REE.
LYC Price at posting:
15.5¢ Sentiment: Hold Disclosure: Held
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