RE: Equity fund raising price10 Jul 2020 13:57
Here’s my take on the possible situation that could occur.
So discussions below have highlighted the blue sky potential here.
Let’s now look at the worst case scenario which would still present a significant increase in sp.
First of all ..... directors don’t have a large holding, could be for a number of reasons and one of them seems to be that they would get diluted on any equity raise.
So they decide to give themselves options / incentive shares at £2 a share.
Secondly any decent asset they get will not cost less than £100m so for the sake of this debate they need to raise £100m for acquisition.
It could very much be the case where 75m shares are issued at £1.50 a share to raise just over £100m after costs etc etc.
The main holders would take up those allocated shares knowing its a producing asset and with an agreement based on dividends issued within 18-24months.
Remember this is the first deal so although we want it massive it could easily be a simple deal at 30-40% above today’s sp
They want to do 2-3 deals and maybe there’s too much risk for the big boys to invest at £5-6 re-listing knowing the Bod get free shares at £2. It’s like the backers are giving them free money.
Just a thought, I’m still long and strong but the above is a worst case situation and still 40% profits to be had from today’s sp.
Either way there’s easy money to be made here.
Ps. Also the lower level the big boys find the deal at ... the safer their investment is, they would rather fund a deal at £1.50-£2 rather than £8 a share.
Finally there will have to be equity issued in the new deal ......and it can be significantly higher than today’s Sp just like RRE did.
The range / placing is from £1.50 to £5 a share.
Hope that helps us understand. I’m still with wisha. It’s boooooooom time here
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