RE:RE:RE:RE:I hope Novo does well...I prefer KL diversify more Attached is a cartoon showing big fish eating smaller fish to illustratre the scenario I am postulating
https://www.google.ca/search?q=big+fish+eating+smaller+fish&client=firefox-b&dcr=0&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwid1Nzx3oXZAhXrYt8KHZ3nAyoQ7AkIMg&biw=1142&bih=536#imgrc=C-suJvmE7kMzCM:
The sequence may not be the same, but there are 5 "fish" character in this theatre, starting with the smallest (ignoring small difference between Cdn and Oz dollars, we only look at the big picture)
1. purple octopus, DEG (Cap: $40K)
2. yellow fish, ARV (Cap: $126M)
3. purple fish, NOV (Cap: $550M
4. green fish, KL (Cap: $4B = $4,000M) imagine It has a saddle with ES sitting on it with 10%
5. orange fish, the biggest of them all with no name attached, yet (Cap: ~$26B)
The green fish knows that it has to watch its back, hence will try to bulk up. The first target would be (imo) to gobble up the little optopus (DEG with a RE of 1.5Moz plus conglomerate potential...it's a juicy target). Next would be ARV. The market Caps of these two are low enough. Even with 50-60% premium KL can easily afford to take them out with minimal dilution. The combined cap would be something like $4.26B which is still not big enough (only 4.26/4 = 6.5% increase) to scare off the big bad orange fish.
The next logical step for KL would be to merge with NOV. Actually, KL can do this anytime, but the sequence above would be much better and more logical, i.e. mopping up all the small pieces first. Then, when the timing is right, offer
NOV $1.2B, or $8/s for creating a combined company with a Cap of $5.2B.
The big bad fish, if it wants to get ES off the saddle would have to offer something like a 60% premium or 5.2 x 1.6 = $8.3B to get the entire KL package, the green fish and what has been partly digested in its bowel. Digression: It might not been a dumb move when NEM sold a good chunk of stocks to KL, so that KL would do the heavy lifting for it, one clever fish!
Note that $1.2B was used for NOV as a trial balloon (screams were heard every where, too low, too low), since it would depend on NOV's luck in finding the nuggets during the "bulk sampling operation". If it fount lots and lots of nuggets, the SP could be quite a bit north of $8/s, but I am not brave enough to go too far beyond the historical SP data. May be $10/s?
Can NEM afford to double the price, say to $16B (DEG and ERV may have some "breaking news" which would add significant value to KL) as an offer for KL, after all its Cap is almost twice of that amount (~$26B). Merger of the two equals?
Just speculating folks.
GH
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TXRogers wrote: goldstd69 wrote:
If KL does plan to merge with Novo...do you think there will be a third party who tries to outmaneuver KL?
Or more importantly, is there third party that will go after KL? Unfortunately, I will not attempt an answer on that one. But there is much bigger Money out there that has the capability if things prove out positively. Another primary reason for KL and NVO to merge and fortify further when the time comes. Tx