Incitec Pivot Ltd T.IPL

Plastics

[Rakaposhi]

The game is all about plastics. Don't forget that West Coast Olefins is building a plastics plant on the coast. Ken James (Olefins) speculated there was room for 5 or 6 more similar setups in BC. IPL is one of the first ones out the door, with a large part of the project derisked. That and the fact it's a solid player in all its other markets makes it a juicy target for a takeover and/or asset breakup.

It doesn't surprise me someone is trying to take it out. There was a bit of consolidation in the tar sands companies earlier; it's not a surprise there is some movement in other parts of the value chain. After all, PPL bought VSN, IPL did some buying etc.

I sure hope they can fight it off. I have held IPL for nearly a decade and my return ex dividend is 306% at this point.

The plastics situation will be a huge cashcow with the prospect of rising dividends for the forseeable future post 2021.

I doubt PPL is a bidder here. I sure hope it's not a US company otherwise it gets messy tax wise.

None of this has (much) to do with the normal valuation metrics at this point. Someone is trying to get into the plastics market the fast way by doing a takeover and maybe spinning out the rest elsewhere.

I would not be surprised that withou further news we drift a lot lower on Monday, which is fine by me.