RE:RE:RE:RE:RE:Anaconda to triple in share price: Failed venture or bold venture ?
Using ANX as an example .. perhaps there is others.
I think ANX could increase the shares outstanding by 50% and merge with RCG. 1 new ANX share for 3 RCG shares.
RCG has substantial tax credits that are good as gold to ANX. Let’s give them a haircut and say they are worth $10M.
RCG’s balance sheet effectively looks like this to ANX.
balance sheet $31.3
liabilities $8.3
shareholder equity $23.0M
In this optic it has the same percentage of debt as ANX’s balance sheet. It is a peer.
Why 1 new ANX share for 3 RCG shares ?
RCG is half the size of ANX.
Shares outstanding 119 and 175 or 2:3.
(1/2)/(2/3) = 1/ 3
RCG’s tax credits look good on the back of the envelope. But RCG’s liabilities are real. It will be up to a lender to decide if ANX’s existing measured resources, cash flow and prospects look good enough to support a merger.
Is 1 new ANX share for 3 RCG shares fair ? RCG could broken up into cheaper bits in a fire sale. But then again RCG's tax credits might be worth more than $10M.