Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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https://news.sky.com/story/aa-bidders-line-up-ex-centrica-chair-to-lead-breakdown-group-12139399
£3bn total less £2.6bn debt = £400m for the 623m shares, or 64p per share.
But "£3bn" could mean £2.9m, ie 48p or £3.1bn, ie 80p.
Furthermore, there'll be only a "modest premium" over the closing price of 33p. In the context of a bid, I suppose modest might mean as much as 20%, implying 40p.
So, FWIW, my prediction is 40p - 45p.
A bid is a bid though, and whether it's a tad over or more than that, I can't see it being topped.
I'm quite fortunate as I've come into this only recently at the end of October. For long term holders it's been a bumpy ride but some clarity will be welcome.
Let's see what happens tomorrow and that will be me closing out.
Pianista, didn't realise you were on the AA too.
Always enjoy reading your really good considered posts. Thanks!
Indeed let’s wait to hear some more info. Remember one of the so called analysts The times were speaking to said this would go for 5p just a few months ago..
If the 3bn is correct it’s roughly 63p but anything above that has a big impact on the price. Just 100m more takes it to roughly 85p which may be a lot more palatable and still a steal on earnings multiples.
Hi Doofus! I've enjoyed your musings over on Saga as well. I came to invest in the AA through my interest in Trakm8, which supplies the kit for the AA's Smart Breakdown. I got in here at an average of 19p, so I'd be happy with 40p, though I wouldn't turn my nose up at 50p, which would go a long way towards offsetting my rather hefty paper loss on Trakm8...
I think there is some good news fairly soon for Saga. Definitely a hold for me.
I've only 20,000 AA shares and assuming an offer comes tomorrow or Tuesday, will then close.
Never heard of Trakm8. What's your view? Worth a punt? Obviously would do my own research too, but nice to have a view from someone who knows their stuff
To clarify as the sky article is vague about it:
“A formal bid is likely to be pitched at a relatively modest premium to Friday's closing share price of 33.55p, according to analysts.“
What analysts? It is vaguer than other sections of the article such as the prospectus chair. Analysts have given anything ranging from 5p up. So could still be quite a bit over 40p. Agree with Rox why would ABC etc be topping up if they are only going to make 7p a share if 40p.
Exciting next 24-48 hours. A 07:00 RNS would be very welcome.
Doofus - Saga's also a medium-term hold for me. I can certainly see it settling at £4/£5 next year. Beyond that, who knows?
On Trakm8, there's a trading update this week (Thu/Fri probably), so we'll soon know more. SP is very depressed right now, but all being well, it'll recover. It just needs things like the AA's Smart Breakdown to take off. Be warned though, it's a very thinly traded AIM stock, so it tends to be a bit of a white-knuckle ride!