RE:RE:How about...Market cap of course helps if the negotiations revolve around premium to market cap. Of course, one of the fallacies pertaining to this train of thought is that the suitor ALWAYS wants to pretend that they are doing the shareholders of the target company such a favour if they offer say 20 or 30% premium to current trading price in an attempt to pilfer the company away from the owners.
Honestly, if an acquiring company wanted to obtain 50% of the shares outstanding so as to completely assure themselves of a buyout and were to do so via the open market like the rest of us retail have to do when we want to acquire shares, what would happen to the share price?
If RIO wanted to add 42% to their ownership of WRN so as to control the terms of any buyout, how high do you think the market price of WRN would jump to? We know that it would jump well above $10 a share. No, making a lowball offer to avoid paying the true price needed to obtain a target company is a way to screw the shareholder out of the true value of their company.
I hope Paul understands this. I believe he does since he was talking about the $4 billion NPV of the project at current metal prices. Speaking of return, if RIO were to buy $4 billion for $2 billion, that is a "fantastic return" of 100% But, it is also fair to all parties involved.
Paul has to stick to his guns and negotiate from STRENGTH: the NPV of the project and the fact that RIO (or any other suitor) paying half of it = 100% return.
IF RIO balks and starts yakking about market cap, Paul merely has to borrow my logic from above and negotiate around the stance that RIO can go see how expensive it is to buy up 40% of the shares in the open market. That will take care of any shortfall in market cap real quick!!!!
Folks, all it takes is a strong CEO who won't kow-tow to the underhanded tactics that many other suitors have pulled during negotiations in the past. Our price tag is $2 billion USD and that price will only continue to inch upwards year by year due to inflation.
BTW, that equates to my target buyout price in the double digits USD.
Agreed though Sooner, that there likely won't be a buyout this year and certainly not at the low price of $6. If a humble retail investor such as myself can understand the basic logic I just layed out, don't you think Paul and the BoD can do the same?