Vault Minerals Ltd (ASX: VAU)
Hi MM team, Vault share price now seems to be above the merger deal payment to VAU shareholders, is that correct? If so, is it time to sell VAU above $6 or is the future Genesis price worth holding on for? Thanks Trish
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Answer
Hi Trish,
The price will move around given the scrip component of the deal. The GMD share price is important in this calculation rather than using a straight $6 for VAU. As of Thursday, it was trading at a ~1% discount, which is the normal merger arbitrage spread. Selling VAU today and buying GMD directly achieves almost identical economic exposure to the same upside, without the residual scheme approval risk. To clarify the deal:
- Script component 0.7629 x GMD shares.
- Cash component 47.5c fixed.
So, multiple the GMD share price by 0.7629 and add 0.475 to see the true value you are getting from your VAU shares.
The decision to hold through to completion is effectively a decision on whether GMD is your preferred exposure to the gold sector moving forward.
