The 42c sell line up was annoying (imo), buyers jumping in.
MMX could head close to 50c soon. As the sale vote draws near.
If you look at the 2 other similar sales in iron ore going (ie. the takeovers), MMX offers buyers an arbitrage opportunity to make some profit. Esp. when MMX is trading way below the Mitsubishi offer aka 51c.
Look at the following examples: MMK of Russia's bid for FMS at 30c, when FMS is trading at 29.5c atm. Risk of this deal not going through is the Federal Court has freezed MMK's Australian assets.
The other example: AKI, which received an offer from Exxaro for 51c, but will increase to 57c "if it secures" 75% stake in AKI. The stumbling block is rival EQX who holds 20% stake in AKI, was a likely bidder, has yet to voice support or accepting Exxaro's bid. Yet AKI is already trading at 56c, way above the 51c bid price.
The MMX-Mitsubishi deal is more than likely to proceed. The only stumbling block is if shareholders oppose the sale to Mitsubishi, like what the independent expert report says: if they deal is not approved. MMX will likely be placed into voluntary administration. Making the deal very certain to succeed.
Also with news media suggesting that fund managers holding MMX prefer a return of capital with the sale proceeds VS Posco's preference to use the money for new growth opportunities. If fund managers would want their way. I would say they would be using this arbitrage opportunity to increase their stakes and have a greater say with what to do with the sale proceeds.
I would say MMX is gonna see the SP rise close to 50c due to fund manager purchases.
MMX Price at posting:
43.0¢ Sentiment: Buy Disclosure: Held
