Surge Battery Metals Inc. V.NILI

RIO has to pay $ 5 billion premium to buy Arcadium

[deepoil0808]

I have repeated it countless times that stock price is IRRELEVANT indicator when it comes to determining the buyout price.

Case in point:   Arcadium 

Was trading at a market cap of $ 3.3 before RIO enteres the picture.

A big investment firm that holds shares in Arcadium said that the buyout price needs to be $ 8 billion and up based on the value of the asset.   That would mean an almost $ 5 billion premium or almost more than DOUBLE the current market cap.

We can say that investors were asleep, like they are on NILI, throwing away shares for nothing, not realizing they just gave their winning lottery ticket away.

Here is the press release from Arcadium

In a letter to Arcadium’s board, another investor, Blackwattle Investment Partners, said a deal would “require a significant premium to realize fair valuation for the business.” 

 

“The timing of this potential sale could not be at a more value destructive period for shareholders,” Blackwattle portfolio managers Tim Riordan and Michael Teran wrote, adding that the global lithium market appears to have bottomed and any sale price should be near $8 billion.

https://www.bnnbloomberg.ca/business/international/2024/10/06/rio-tinto-confirms-its-made-an-approach-to-buy-arcadium-lithium/