On Simple Fact On Why Deal BadHBM has roughly $5.50 in cash - that's plain fact.
HBM was trading at cash value prior to LUN announcement. So shareholders in HBM was effectively getting its nice mining assest for free.
In this time of plunging commodity prices and horrible credit markets, HBM, trading at cash, was a great low-risk investment, which had great upside.
It is possible that at high metal prices LUN's assets may be worth more than HBM. But why trade something safe and cheap for something that may be worth more, but only at high metal prices?
The story is even more simple.....
HBM has $5.50 in cash!!!!!
HBM traded down to below $3.00 and now closed at $3.90.
How could HBM be worth less than CASH?!?!?!?! The market is saying this combination is dilutive to HBM's overall value even risk-adjusted.
And if I buy shares now and somebody could (hopefully) cancel the deal and offer to pay out most of the cash I stand to make 50%+ instantly with NO RISK!!! I am rooting for JAG. Apparently Corriente is asking for a review for this transaction and they imply that management and its advisors (which own no shares) are acting only in their own self interest.
How isn't that better than risking whether a HBM-LUN merger will make money or not long-term?