Cline Cambrian Merger Numbers
The following are approximate numbers for the purpose of trying to get a ball park figure to get an approximate valuation on a Cline & Cambrian merger on a 1 for 1 basis.
You will need to read and fully understand my Hypotheses on a Cline Cambrian merger.
Link at bottom of page.
Most importantly this valuation can be used as a benchmark to determine what other companies like Teck or Sherrit would have to pay to trump Cambrian.
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Cline & Cambrian Shares Out
Cline = 93 Mil FD Shares out
Cambrian = 98 Mil FD
Cline & Cambrian Combined = (CC) = 200 Mil FD
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Value of WTN Now 2008
WTN Market Cap = $1.5 Billion on 4 Mil Ton coal production
Cline Cambrian own 60% WTN = $900 Mil = $4.5 per CC share
Assumption- Cline Cambrian transfers all Cline Canadian coal properties for 60% consolidated ownership. Asset increase benefits WTN > share dilution, holding the present day value equation true and very conservative.
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Value Coal International After Buying New Elk
Coal International (CLN) shares out now 100 million (Now Cambrian owns 30 million CLN)
Coal International Issues 120 Mil shares for New Elk = 220 Mil shares FD
Cline Cambrian owns 150 Mil or 68%
Assume New Elk goes into production ramping up from 2 to 4 MTons.
Coal International now produces from 2 coal mines.
Lets assume this combination has the same value as WTN in market value.
Lets assume Cline Cambrian owns 60% after New Elk Financing
CLN Market Cap = $1.5 Billion on 4 Mil Ton coal production
Cline Cambrian own 60% CLN = $900 Mil = $4.5 per CC share
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Total Value of 60% Ownership WTN & CLN
Cline Cambrian own 60% WTN = $900 Mil = $4.5 per CC share
Cline Cambrian own 60% CLN = $900 Mil = $4.5 per CC share
Total = $9 per share on amalgamation with further support from Iron project.
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Value WTN & CLN 2011
Fording FDG = 14 Mtons & Mcap $10 Billion.
WTN = 8Mtons & CLN = 6Mtons Total = 14 Mtons
The Mcap of both companies should = Fording = $10 Billion
Cline Cambrian = 60% of $10 Billion = $6 Billion. = $30 per Cline Cambrian share.
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On top of the above Cline would also have its Iron, Uranium and Gold projects
The synergies are so great and price gains so good for insiders I am sure they will merge.
No insider is going to sell at $4 per share when they can get above $30 in 2011.
Clines Iron project is better then its coal projects.
The numbers show $30 dollars per share if they merge. Is very is very conservative looking out to 2011, because it does not include the iron project.
So my market call for $7 on merger and $10 after that is very low .
Link
Profs Cambrian Merge Hypothesis