I do not think we are given a choice here. We have to sell (at a loss) or participate unless the share price drops below $2,7 before the retail offer come into effect. Otherwise we will end up holding expensive diluted shares. There is a heavy dilution process in this, ~250m new shares, i.e. new number of shares a bit more than ~750m. The question is how are the earnings per share will look like next year? If Tropicana gives 0 earnings then we have an equivalent eps of approximately 2/3 (66%) of the current one. But Tropicana will contribute to earnings. Anyone can valuate by how much approximately? In other words, will 2/3 of current earnings + Tropicana earnings = current discounted offer (@ $2.7 per share). My feeling is that this 1/3 dilution of the earnings is so significant that cannot be easily recovered. But this is just a feeling.
RRL Price at posting:
$3.17 Sentiment: None Disclosure: Held
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