what will Cliffs Pay?pdcon1 your post got me thinking - what would Cliff have to pay more for a merged company.
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I just took some approximate numbers to see how it might work out .
VERY Very interesting.
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I now need to organize it and put it into some simple presentation format for a post.
For practice. - someone more organized could probably do it better - Hope it makes some sense to others
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say KWG has 520million shares at .13 = 67.6 million to cliffs
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say SPQ is at 470million shares at .13 = 61.1 million to cliffs
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Total dream sale to Cliffs is $128,700,000..
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SPQ is the smaller - share - fry - they buy on the market and bump the offer to get controll for say .25 cents average cost.
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470mill X .25 = $117,500,000
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The other company we know especialy KWG not being able to do PP without cliff. They now have the share price eternally in the sub .13 range - i will be generous and say they get that .13 .
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520 million X .13 = $67,600,000
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So \Cliffs is total owner somewhere around $ 185.1 million.
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If they have to make a play for this merged company - they face 990 million shares IF they pay the same price as the last scenario the OFFER would BE = .187.
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Would that be a price that would put enough sellers in the market so that Cliffs could hope of getting controll that way?
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they would be paying FWR prices at about .25 cents *** I do not have the correct share numbers so this is approximate only).
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The merged company forces them to pay one pile of cash more than their initial plan. I told you how deadly it is for management when the budget line is crossed - watch the Cliffs adds for new management in the next while.
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THEREFORE
The merge cannot be what Cliffs wants .
.25 cents for one company is possible not for the stiffened resolve in a company with controll .
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Make em pay
I urge you to read Rallards and TXRogers post today - they both have some good new insights worth looking at.
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Kasm