CS-SST deal and CS acquisitionCS-SST deal and CS acquisition
I bought into CS a few months ago, after the SST spinoff, on a recommendation. I was not very interested in SST before the recent deal, but I am looking at getting in now.
I won't post more numbers, as I think these have been thoroughly covered in previous posts, positive and negative on the deal. Lurking on the CS board, listening to both sides of the argument, I think the deal is good for CS if they make a good acquisition soon. I think it’s good for CS even if it takes awhile for them to make an acquisition, but the sooner, the better. That’s what the upfront cash is for. Speaking with Patchett briefly at PDAC, and listening in to a conversation between another visitor and someone else from CS/SST (didn’t catch the name), my impression is that CS is very actively looking for a good acquisition and have already rejected a few, but won’t rush in to one just to show they are acting.
Is the deal better for SST than for CS? That really depends on the price of silver over the next few years. You have to pick your basis and make your call, and I think that CS management made a reasonable call. If silver goes up over the next few years, the deal is good for CS, good and maybe more favourable for SST, and puts CS in a better position to make a good acquisition soon.
This deal fits in well with the risk profile of each company - CS has less risk but less upside than SST.
If anybody is at the PDAC and can comment back on what they hear from CS and SST, I would love to hear it.