RE: So Many Wise Words!14 Nov 2020 18:10
"Can we expect a low offer to take ZIOC private?"
I cannot see GLEN taking a low offer. Current ZIOC market cap is around £17m so the whole kaboodle is circa £34m. That is way too low.
The reason is that it is a zombie opportunity at the moment, but as soon as there is potential interest the market value is increased dramatically, however, it is only worth what someone will pay. Two sides of a coin.
But to get to the point of being a viable project requires GLEN to agree, will they take the current market value? what would they take, and what would we agree to??
There are, of course, a number of options:
1. Take out GLEN at £17m and ZIOC/consortium of investors go it alone.
2. Take out GLEN at a higher, agreeable price, and ZIOC/consortium of investors go it alone
3. Make an offer to GLEN to take out part of their holding at lower than, or current market price, but they get a free carry on the project.
4. Make an offer to GLEN to take out part of their holding at higher than market price, but they pay their share on the project.
I think number 1 is unlikely.
Number 2 is possible but still not attractive to GLEN unless the price is in the £xxxm
Number 3, I think is likely and attractive to GLEN as they eventually get value, a return on their investment, without any further CAPEX/OPEX
Number 4 is possible but likely less attractive to GLEN unless the timescales and returns justify.
On every single scenario ZIOC rerates as the project advances and a multi billion project arises from a current £34m JV. The multiples on the rerate could be eyewatering (tears of joy that is).
What is clear is that it is GLEN holding things back, hopefully, at some point, a deal is done and we get a massive rerate.
Would be interested to hear other's views.
Aberdeenman
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