AAL has been “in play,” but after receiving two scrip bids from BHP, we believe if a third were to materialise, it would not be substantially higher. We should remember that the stock was trading ~23% lower before BHP’s initial bid. The risk/reward isn’t exciting around GBP27.00, hence we weren’t surprised to see the stock slip over 2% last night.
- We believe BHP is now 50-50 to lift its bid for a third time. The mining giant may want AAL, but at some point, the risks will not be warranted.
MM is now neutral on AAL around GBP27.00
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