Why is WSA trading above the bid price?

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Question asked 15/01/2022

Why is WSA trading above the bid price?

G'Day James, I note that WSA is trading above the IGO offer price, which otherwise looks to be quite well supported. Is the smart money betting on a contest, or otherwise expecting the offer to fail? Thanks, Ron

Answer

Hi Ron – Happy New Year. IGO have offered $3.30 all cash for Western Areas (WSA) and the WSA share price is now $3.42, I presume on the back of expectations that a bid from another party may materialise. Originally, IGO were talking an all scrip deal which made total sense for IGO given they had higher valued shares trading on a large premium to net asset value, however for WSA, a cash deal is better. That implies to me there was a reason for the change i.e. some competitive tension but from a party not yet in a position to launch a deal. Time will tell however that would be my guess.

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Western Areas (WSA)

LAST UPDATED 15/01/2022 06:40

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