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Originally posted by bererkwarrior
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It's never a good idea to overpay for an asset no matter how good it is. The idea is to add value for shareholders, not destroy it. If the deal was accretive the share price would be trading above the TERP....it's not & barely holding at the CP price. That says it all. Deals can't be valued on a hypothetical price in the future- that's nothing but hearsay. Yes I think macro conditions are supportive of an increase in the price of metals but there's no guarantee. Ultimately it comes down to resource & the cost to extract it. What you pay should reflect that taking into account synergies that might be available (none here for RRL). Plain and simple they overpaid by an order of $150-200 million which is massive for a company of RRL's market cap.
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Expensive doesnt equate to overpay though. It's expensive due to the fact the asset is tier-1.
Last edited by
Calvo :
16/04/21
(20min delay)