RE:RE:When will IMG take a run at MXI? We will get a really good idea how IMG is faring with their financials a week from tomorrow, August 6th.
In these times, it's all about cash flow for survival. The first quarter had them burning around $20million based on cash flow from operations minus capital expenses. Q2 they are going to get hit with lower revenues and possibly higher costs coming out of Westwood so it might not be a pretty quarter with a big bite out of their cash pile. We'll know next week if they have managed to reduce other costs enough to match those other losses.
That said, the cash pile is pretty big in Canadian dollars, which is what they would buy MXI with. They have somewhere around $CDN 1.1-1.2 billion cash including bullion at market prices so at this point, a MXI purchase is still a small proportion of their cash. The effect of declining CDN/US$ exchange rates over the last year have added well over $150 million to their $CDN buying power. Also, they always have the option of giving MXI shareholders some paper and make it minimal or zero negative cash.
Here's how I have assigned probabilities of a buyout of the most likely events:
1. By end of September/15 25%
2. By end of January/16 35%
3. Mid 2016 25%
4. Never/something else 15%