The expert report on the merger of Independence Group and Sirius Resources shows little benefit from the merger for shareholders. The transaction has been deemed fair and reasonable. The Independence Group assets were valued at $871-1,054 million. Sirius was valued at $1,106-1,648 million. On the day prior to the bid, the combined value of the companies had been $2.71 billion. Investors are currently paying $1.96 billion to get $1.72-2.44 billion in value. With so few examples of success in the sector from which to choose, the weight of money had priced both stocks close to or slightly head of their assessed values. Other similarly high profile stocks in the sector such as Paladin Energy, Sandfire Resources and Orocobre had been treated similarly leaving them all vulnerable to the downside. For some investors, size matters enough for the enlarged Independence-Sirius entity to become a more likely investment. For those investors placing a higher priority on absolute returns, on the other hand, an ‘unfair’ bid for a lower profile company with the potential to enhance value would have been preferable.


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Paul Dennis

Fair analysis 4 months ago but at current prices surely IGO is a good long term investment. Two very good quality assets with low cost of production. I know a lot depends on Ni, Cu and Au prices but how low can it go?