From my perspective, the deal will go through. Given the commitment on Hanlong Mining Investment and the in principle agreements from the government, it should not be a problem.
When we enter these deals, ie Chinese buyer and African country assets, you would expect regulatory risk and should have been priced into your buy levels, ie only buy in when the risk premium suits you.
Also you could see Hanlong providing (albeit a small ) convertible note facility for A$15m as working capital for Sundance as the deal moves forward. Hanlong also holds the biggest stake in Sundance as well. Price of Sundance now is reasonably close to what it was before the deal announcement (however caution here as it seems like Sundance may have a liquidity problem).
Given the reasons above, I would believe the deal would be successful in the end, but the question remains when it will close and will there be another drop in offer price.
Pricing using Merger Arbitrage Manager as below :
Has a 40% premium and a 13.33% implied success. Given this, I would caution against a big position.
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