Hi jfc,You still haven't said why, or who, will buy UEC? Yes,...

Hi jfc,

You still haven't said why, or who, will buy UEC?

Yes, you've mentioned Optus before, and more recently, Primus.

But what you haven't mentioned is the cost to anyone actually buying UEC.

@40c per share, the equity cost would be somewhere between $200M and $250M (depending on whether you factor in yet another 25% premium).

If financed @6.5%, the interest cost alone would be somewhere between $13M (pre-deduction) and $16M.

Then, there would be the facility costs of ~$1.0M per year.

Then, you must add in the amortisation cost (if spread over 20 years) of between $10 - $12.5M.

So, on that basis, UEC would need to return to its new owners at least $23 - $28.5M in pre-tax profit, just to break even.

Now, that's where you and I continue to disagree in terms of fundamental value. Can't help though but admit to losing out on the retail argument.

All businesses eventually have to pay their way. Anyone acquiring UEC will require UEC to also pay its way (where MC now equals 1.7x net assets).

That's what has happened to NTG, and to countless other telcos out there. In other words, gone are the days of acquiring companies paying over the odds to acquire prospective companies. Just ask TVG and PWT. Or IP1, or AMM, or NextGen, or for that matter, NTG.

Retail sentiment and M&A acquisitive behaviour do not necessarily co-incide. That's the reality. That said, yes, UEC did put in a good Q1, but it needs to put in much, much more than that to justify a high and ongoing share price.