worth of csr less sucrogen, page-4

Just for general discussion, another way to look at worth may be to use an existing static value approach.

The present market capitalisation (ie current share price x no. of shares issued) of CSR is about $2.6 billion. For the past 5 years, the EBIT of building products/aluminium/property and sugar have averaged roughly 73% and 29% respectively. Similarly, the net assets (ie assets liabilities) of building products/aluminium/property and sugar are 61% and 39% respectively. (Segment/division figures are shown in the CSR Annual Report for 2010).

If you reduce the existing market capitalisation by 29 or 39%, to account for the hive off of the sugar business, the value of the remaining business could be between $1.06 and $1.23 per ordinary share for about 1.5 billion ordinary shares on issue. Based on current prices, the amount paid by Wilmar may suggest a premium (above book value) is being paid to possibly reflect future earnings potential.

Another point. Given the FIRB reviews and recommends foreign investment proposals to ensure consistency with government policy, it might be better if the decision is released after the date of the federal election.


Disclaimer
Please note that I am not providing valuations, advice, information, recommendations or predictions. The above statements are merely my own comments and thoughts as an ordinary shareholder without any special skills or knowledge. I absolutely disclaim any responsibility or liability whatsoever r for any consequences arising from the use of my comments and thoughts expressed. If you require advice or information, you should seek the services of an appropriately qualified independent expert professional person as well as do your own proper research.