Top 6 ASX takeover picks for 2026 (and reviewing last year's picks - including one 10-bagger)

In December 2024, we outlined our 4-step framework for identifying takeover targets on Livewire here, including 8 top picks for 2025.

Takeovers have been a key contributor to our 33.89% return over the last 12 months for the Seneca Australian Small Companies Fund, and 30.5% p.a. return since inception in October 2023.

Back by popular demand, we share our top 6 ideas for 2026 that have a takeover catalyst.

How did we go?

• De Grey Mining (ASX: DEG) received a takeover bid from Northern Star Resources (ASX: NST) at a 37% premium as we released the article.

• Pointsbet (ASX: PBH) received a takeover bid from Japanese giant Mixi. We exited our position after the first bid, after which there was a bidding war between Mixi (offering cash), and the ASX-listed Bluebet (ASX: BBT) (offering mostly scrip), which is unresolved and shares have languished somewhat.

• Sun Silver (ASX: SS1) rallied 181% on a surging silver price. We highlighted SS1's leverage to an improving silver price, as the largest primary silver deposit listed on the ASX. The stock is now officially a 10-bagger since we first highlighted it as a top pick on Livewire here in mid-2024 at its IPO. Although SS1 has rallied, the valuation does not look particularly demanding relative to other silver stocks, and if the team can prove up some technical aspects of the orebody, we think a takeover is not out of the question this year.

• Monash IVF (ASX: MVF) was the only loser of the bunch, reporting two negative incidents at its fertility clinics which saw the market unceremoniously dump shares. Still, MVF did indeed receive a takeover bid, from a consortium led by private equity group Genesis Capital and major shareholder Soul Patts, at $0.80/share. We view the takeover bid as opportunistic given the significant valuation disconnect between MVF, which traded on 6.5x prior to the bid, and comparable transactions on 12-14x. The takeover bid implies 8x, and ultimately failed to gain board support at that level. MVF looks dirt cheap and now it is in play (read: vulnerable).

• Wildcat (ASX: WC8) shares ended the year 77% higher thanks to a late rally in lithium prices from depressed levels. Wildcat's Tabba Tabba is the best undeveloped hard rock lithium project on the ASX, in our view, given its logistical advantage smack-bang in the middle of the Pilbara, and proximity down the road from the well-known Pilbara Minerals (ASX: PLS). We think WC8 didn't get a takeover bid due to the lithium price cycle - PLS/MIN didn't have the license/balance sheet respectively to do a deal last year - so we'll see if the resolution of those two factors amidst the upswing in the lithium market changes things this year.

• RPMGlobal (ASX: RUL) was a banger. The mining software provider received a $5.00 cash takeover bid from OEM leader Caterpillar (as highlighted as likely in our original article), representing a 32.6% premium to last close and a ~230% premium to our initial price. RUL ends its ASX career shortly as a $1.1 billion software company compounding revenue at 20% p.a. with outsized profit growth, management with a track record of generating shareholder value, strong balance sheet, product market leadership, and yet remains uncovered by all major sell-side analysts. So don’t tell me markets are efficient.

• Red Hill Minerals (ASX: RHI) shares edged higher, despite no bid from logical acquirer, Deterra Royalties (DRR). RHI is far too undervalued, in our view, given the production growth from the Onslow project, operated by Mineral Resources (MIN), which RHI holds a 0.75% royalty over. We wrote up RHI in detail here on Livewire a couple of months ago.

• Catapult (ASX: CAT) shares re-rated significantly, returning 110% to the high, as the company continued to demonstrate inflecting profitability, combined with strong sales growth and market leadership in sports technology. CAT didn't receive a takeover bid, but for the reasons we outlined that CAT would be attractive to an acquirer, they ended up playing out in the public markets.

Anything else to note?

• Infomedia (ASX: IFM) - automotive software supplier Infomedia received a takeover bid from private equity group TPG at a 42% premium to our average entry price. It was unexciting, until it wasn't. Below, we highlight our IFM 2.0 pick for this coming year.
• Emeco (ASX: EHL) - takeover rumour as discount to NTA persists.
• Euroz Hartleys (ASX: EZL) - takeover rumour as Canadian investment banks scramble to get a presence in Australia, as the ASX takes more mining listings share from its North American counterparts.
• Gold Road Resources (ASX: GOR) - takeover bid from its JV partner Gold Fields (NYSE: GFI) who were keen on its 50% share in the multi-million ounce Gruyere gold project in Western Australia. We bought shares in our large caps Australian shares SMA after its first bid in March 2025, which valued GOR at $3.05/share. We were in it for the likelihood of an improved offer which came in May 2025 at $3.40. We think Gold Fields got a good deal considering the skyrocketing gold price (GOR's gold reserves were calculated at a ~60% discount to prevailing prices), and the emerging potential for an underground mine at Gruyere. 

How to find the next takeover targets

We highlighted what we learned about takeovers in this piece on Livewire.

We've seen takeovers in a range of sectors including resources, tech, industrials, and property, among others.

We think the landscape is still favourable, with plenty of private equity capital to be deployed, and miners increasing scrip value conducive to pursuing accretive, synergistic deals.

Below we highlight our top picks for 2026.

Our 6 top picks for 2026

1. Antipa Minerals (ASX: AZY)

$0.61 share price, $419 million market cap

It will come as no surprise to our regular readers that AZY is a top pick (discussed here in written form, and here on Livewire's Buy Hold Sell).

In lieu of rehashing the entire thesis (you can sign up to Good Research to get the next one), we think AZY gets bought by the new owner of the giant, underutilised Telfer mill, Greatland Resources (ASX: GGP).

Here's 4 reasons why we think it happens sooner rather than later.

i) GGP grade reconciliation issues

Greatland Resources (GGP) gold production has been boosted by processing stockpiles in recent quarters. These stockpiles were left over by previous owner Newmont (ASX: NEM), and have provided a 'sugar hit' for cash flow in 2025. But there's a problem: the high grade stockpiles will be extinguished in the March quarter of 2026.

By high grade, we mean the 0.5g/t Au dirt, rather than the 0.3g/t Au dirt, so it's all low grade in actuality.

Despite GGP shares being on a gold-price-induced tear, sooner or later the market is going to have to address the elephant in the room - grade variability in the remaining stockpiles.

“Let me say that our guidance is different and lower than the outlook previously provided… as part of the FY26 budget process we undertook a risk assessment… and felt it was appropriate and prudent to apply a risk factor to the expected grade of the ROM stockpiles, and to some open-pit material to be mined"

Greatland CEO Shaun Day, August 2025

Analysts have been impressed with Greatland's production metric so far, but we suspect that the company might be 'robbing Peter to pay Paul", by using up its higher grade stockpiles to boost short term production numbers. In the next few months, we'll see if Telfer's historic high cost nature and grade reconciliation issues will come to the fore once more for investors.

Meanwhile, AZY's Minyari Dome sits down the road with ~3x higher grade gold and copper grade relative to Telfer (and would be cheaper to extract than Greatland's other project Havieron, which is quite deep).

ii) Greatland is open to doing deals

Greatland's management team are known dealmakers.

And let's not forget Greatland's publicly stated rationale for listing on the ASX, raising $50 million from investors (despite generating cash flow at its Telfer mine).

Greatland has been talking up its ability to do hub and spoke production from its Telfer mill.

The only 'spokes' nearby Telfer (excluding Rio Tinto) are Antipa's Minyari Dome gold/copper deposit and Cyprium (CYM)'s Nifty copper project. Nifty has its own processing plant already, so there'd be no synergies there for Greatland.

GGP is certainly interested in nearby exploration ground, showing its hand in the 18 December 2025 deal with Rincon Resources (RCR) to earn 75% in its exploration ground to the south of Telfer by spending up to $4 million. Greatland CEO Shaun Day remarked that "if our exploration at Telfer South is successful, it presents and opportunity to leverage our substantial infrastructure for the benefit of the JV, including through toll processing ore". It would take years to get any hypothetical discoveries from Telfer South into production - years that Greatland doesn't have.

As Greatland CEO Shaun Day said in an interview on 13 December 2025, "we closely monitor what else is happening in our postcode… we think everything ultimately comes through our mill. And we're happy to do that in joint venture, we're happy to acquire, we're happy to toll treat. There's a number of ways you can solve it. But we're certainly open for business."

We think Antipa's deposit is of sufficient quality to justify a standalone operation. However, it's expensive to build a mill anywhere, let alone the fairly remote Patterson province of WA. The economics of the project would be greatly improved if Greatland acquired Antipa, which would be an accretive win-win transaction for both parties, in our view.

The future of Telfer is moving to underground mining, so why did GGP purchase and refurbish its open pit mining equipment? We note that AZY's Minyari Dome could supply open pit ore to Telfer.

iii) Greatland needs AZY to achieve its premium multiple (and management's incentives support it)

Sure, Greatland doesn't need AZY to keep producing gold in the near term. But GGP still trades at a modest discount to broker NAV estimates. How can this be in a gold bull market, with broker gold price estimates way below spot prices??

Institutional investors simply aren't going to pay a premium for a single asset producer with limited mine life.

With 55% of the Greatland CEO's performance rights weighted to relative total shareholder return, we think acquiring AZY would afford GGP a fuller valuation in the market, without having to punt on gold price to meet KPIs.

After Greatland released its Havieron feasibility study, Canaccord downgraded its GGP price target. In isolation, we don’t pay too much attention to price targets, but there are a some interesting points that caught our eye:

• Timeline: Canaccord revised its Havieorn forecasts to be fully ramped up to 4Mtpa by FY32… 6 years away. Most fund managers have a quarterly time horizon (yes, because investors tend to chase performance more than their supposed "long term investor" philosophy would suggest). 6 years with flawless execution, no cost overruns, no cost overrun, no supply chain disruption… that would be a first.
• Costs: upfront capex at Havieron of $1.3 billion, and total capex of $2 billion. AZY's open pittable ore sits at a fraction of the price, 35km down the road. Capital intensity matters.

Clearly the market isn't buying Greatland's FY28/29 Havieron ramp up target. In any case, given that Havieron only fills less than a quarter of the Telfer mill's processing capacity, there's more work to be done to achieve a premium market valuation.

We noticed a key difference between GGP presentations dated 5 August (Diggers & Dealers), and 15 September (Mining Forum Americas), with the insertion of the below slide.

Greatland talks to its "really extensive footprint", yet keen observers would note that AZY's light green dominates Greatland's own slide on the regional opportunities around Telfer. The circle below encompasses Greatland's native title agreement, which by Greatland's own admission, accelerates permitting, and also approximates truckable distance. AZY's Minyari Dome sits within this boundary.

We understand that Greatland has been talking down Antipa's permitting pathway to investors late last year, shortly after Greatland included the native title permitting radius in its presentation deck, promoting its own ability expedite permitting.

iv) Better time to do this deal now than ever before

The GGP share price continues to rip higher, given its full exposure to the recent rise in the spot gold price.

As such, there's never been a better time to deal since Greatland listed on the ASX.

GGP has $950 million cash, and is adding approximately half of AZY's current market cap in cash each quarter at the moment.

As Telfer approaches end of life, GGP is ramping up exploration spend at Telfer to try and extend mine life. Sure, you can drill your way out of this conundrum, but exploration is uncertain. And if there was "gold everywhere" at Telfer like some Greatland shareholders claim, Newmont would never have sold it. So as Greatland talks up its "Stage 7 extension" at West Dome, we ask the question: how much juice is left to squeeze from the Telfer lemon?

Alternatively, you could spend $600 million for a well understood, high grade resource, and double your reserves in the region so you can commit to more than just a "multi-year" mine life at Telfer.

Antipa is currently ripe for the picking given that the AZY share price has disconnected from gold fundamentals.

AZY trades on $155/oz, below the WA gold developer peer group on $210/oz, despite AZY being the largest gold development project in WA that hasn't been subject to corporate activity. Aussie gold producers trade at an average of A$1,500/oz of reserves, so there's plenty of upside to share if Minyari Dome ore can find its way through the Telfer mill.

GGP already owns 6.1% of AZY.

AZY remains a top 5 holding in the Seneca Australian Small Companies Fund.

2. NexGen Energy (ASX: NXG)

$16.52 share price, $12.2 billion market cap

NexGen Energy holds the world's best undeveloped uranium project. NexGen's Arrow deposit in the tier 1 jurisdiction of Saskatchewan, Canada, hosts a resource of 3.75Mt @ 3.1% U3O8 for 256.7Mlb contained U3O8. With its critical permitting catalyst in early 2026, we liken NXG to De Grey (DEG) 2.0, which was taken over at a similar juncture.

Scarcity:

Tier 1 mineral deposits are scarce. Those not held by a major miner are exceedingly rare.

NexGen's Arrow has the combination to attract major miners: grade and scale.

NexGen's 3.1% grade jumps off the page, especially relative to ASX peers. NexGen expects to produce at a cost of just over US$10/lb, which is best-in-class.

Arrow is a large, high grade asset, and the best left globally, with potential to produce 30Mlb p.a. at nameplate capacity which is significantly more than uranium peers. Acquiring this project would truly move the needle for any major miner. Athabasca basin uranium deposits are hard to find but are on average 100x higher grade than the other producing mines currently.

Synergies:

Cameco makes the most sense as an acquirer given its regional synergies its Cigar Lake and McArthur River mines also located in the Athabasca Basin, Saskatchewan, Canada. NexGen offers a high grade asset that could come online later this decade and refill the production pipeline for a major that has assets approaching <10 year mine lives, and who has experience constructing mines. Since NexGen discovered Arrow in 2014, a NexGen takeover has never made more financial sense for Cameco (TSE: CCJ) than it does now. Even incorporating a hypothetical 40% premium to NXG's prevailing price, Cameco could emerge with a 82.5% / 17.5% pro forma split in a scrip bid. In recent months, on a big up day for uranium, CCJ has added NexGen's market cap in a single trading session. On broker estimates, CCJ trades on 2.5x NAV compared to NXG on 1.2x, so a deal would be accretive.

50% of global uranium is supplied by Cameco, Kazatoprom, and Orano. Given NexGen's size 30Mlbpa in a ~150Mlbpa market, the company has significant strategic consequence for the major players. Cameco could upweight its position in global supply from ~15% to ~30% by acquiring NexGen and become a western heavyweight to rival Kazatomprom in Kazakhstan.

Any diversified miners looking to increase their exposure to uranium and clean energy as a thematic may also be interested parties in any NexGen sales process. For example, NexGen has 3x the production capacity of BHP's Olympic Dam mine.

We expect further synergies from running the company at a more targeted cost base.

Gettable:

The NXG register is wide open, with nobody holding more than 6% and no strategic/blocking stakes.

Majors are happy to pay for certainty, even if it means paying a premium.

NexGen is entering the final stage of Canadian federal approval, following the commencement of the permitting process in 2019. NexGen has its first commission hearing on 19 November 2025, with a final commission hearing on 9-13 February 2026. Following this, a decision is due within 2 months of the final hearing. Approval would allow construction to begin.

This is a key catalyst, and not without risk. However, Arrow has full provincial and Indigenous approval, national interest status, a small surface footprint, and is located in a mining-friendly jurisdiction. CEO Leigh Curyer brings permitting experience (Honeymoon, now owned by Boss Energy), and incoming PM Mark Carney has signalled support for fast-tracking major projects.

For acquirers, the ideal window is post-approval, pre-construction — similar to 2024 Good Research stock pick, De Grey Mining (DEG), which received a takeover bid from Northern Star (NST) during permitting.

Valuation

We see a 30%+ premium as being fair and justifiable for an asset of this quality. While the NXG stock price has run somewhat (with the uranium price), we note similar deals done for tier 1 projects (eg. De Grey, Adriatic Metals, Oz Minerals), major miners have paid 30-50% premiums for companies even after share prices running up significantly leading into the announcement. Cameco, the largest listed uranium company globally, trades on 32.5x vs NXG on 3-4x (albeit not yet in production). Given the long life nature of NexGen's Arrow project, you could easily justify at least 6-8x as a more appropriate valuation, and clearly the market is happy to pay a premium for uranium given the favourable dynamics of the commodity.

3. Readytech (ASX: RDY)

$2.45 share price, $303 million market cap

Readytech is a systems and regulatory management software company with sticky customers (governments, universities, TAFEs, large corporates), that due to market frustration, trades at a bombed out valuation of 2.4x EV/Sales. The company is profitable, growing, and has strategic appeal to private equity.

Readytech has been subject to takeover interest in the past, receiving a A$4.50 cash per share bid from Pacific Equity Partners (PEP) in late 2022, which fell over at the last minute. This offer represented a ~35% premium over the share price at that time.

Readytech's current situation, trading unloved/forgotten at a 40-50% discount to the bid price (18.5x P/E), is reminiscent of auto-dealer software provider Infomedia (IFM), which had $1.75 cash bid (also from private equity) fall over in 2022, seeing the stock trade down to $1.25 in the following couple of years (16x P/E), before getting another offer at $1.70/share cash in August 2025. We see RDY as likely to attract takeover interest in the coming 12 months.

This takeover thesis differs slightly from our usual framework when private equity is involved, as synergies are less paramount for a financial buyer compared to a trade player. As a financial buyer, PE needs scalable platforms with predictable cash flows, fee-generating potential, and an entry price that allows attractive exit returns.

This is exactly the type of asset PE targets (as Readytech’s history shows). Sticky, recurring revenue provides modelling certainty for the private equity boffins, while large addressable markets in government and education support organic upsell and M&A-led growth, accelerated through balance sheet leverage.

Valuation:

At $2.50, RDY trades at a 48% discount to the previous takeover bid of $4.50 (implied 18-20x EV/EBITDA), which major shareholders vocally opposed as undervaluing the company.

RDY trades at significant discounts to the ASX technology sector, as well as key comparables Technology One (TNE) and Objective Corp (OCL).

Readytech is actually a Rule of 40 stock, with EBITDA margins of 31% and sales growth of 10%, exceeding the 40% combined threshold. These rule of 40 stocks typically trade on 6-8x Sales, not 2x.

We think the most likely way this valuation disconnect gets resolved is by takeover of the whole company. However, you could also justify a sum of the parts play, and break-up scenario which could also see more strategic interest in the company, and value realisation for shareholders.

Accel-KKR has been active in deals, buying out struggling ASX-listed HR and payroll software operator Elmo Software (ELO) in 2024 for 3.43x EV/Sales. Other larger deals have been struck in the 6-7x Sales range for Readytech's sectors. RDY will likely never trade on the lofty 10x EV/Sales multiples of some high-flying peers given the volatility and lumpiness of government contract spending (earnings risk). But when these businesses get going, they do tend to command a premium multiple, and we see value realisation of ~$4.00/share as achievable for RDY.

Gettable

Now is the time to strike.

Readytech's major shareholder is Pemba Capital, at 28.3% of the register. Pemba Capital floated Readytech in 2019, but is not a natural owner of this RDY stake, and has been holding since IPO in 2019, only reducing slightly in 2021.

Pemba Capital's RDY stake is held in Pemba Capital Partners Fund I, initially acquiring Readytech in January 2016 via Fund I. Typically, a private equity buyout fund like Fund I operates in a 6–10 year lifecycle, meaning Fund I might reach its planned exit horizon sometime between 2022 and 2026, depending on its vintage and extension provisions.

Our research suggests that there are a relatively small number of investors (LPs) in that fund, and the fund has met their target return, hence why they have been in no rush to sell out completely, but ultimately they will want a result at some stage. And Pemba is unlikely to shoot themselves in the foot by dumping on market - instead, we think they are highly motivated to do a deal and exit at a premium, with a takeover the cleanest exit available.

Any bidder will also be looking for the support of Microequities Asset Management, a fund manager who holds a 14% stake in the company. Microequities publicly opposed the 2022 deal, arguing that Readytech was “a mini TechnologyOne in the making" and that it should trade north of A$6/share in the medium term based on fundamentals and sector comp multiples. However, we think Microequities will be amenable to deal, having benefited from the takeover of portfolio holdings such as IT services provider Empired (2021) by Capgemini, broadcast‑media advertising platform GTN (2024), it just comes down to price.

There is precedent for companies getting sold from private equity, and then a different private equity company acquiring that company some years later (MYOB, Healthscope, Estia Health, Dick Smith, Keypath Education). This is the private equity playbook. You want to be on the accretive side of these deals, buying low when discarded/forgotten about by the market, rather than the other side, buying it off them at juiced up valuations (eg. Greencross).

Readytech's new CFO Bryce Thompson is an ex-software investment banker with deal experience (MYOB, Potentia). Deal structuring could allow management to roll into the continuation vehicle to entice deal completion by retaining upside exposure to the business.

4. Stellar Resources (ASX: SRZ)

$0.034 share price, $104 million market cap

Stellar Resources owns the high-grade Heemskirk tin project in Tasmania, a tier-1 jurisdiction, with a resource of 77.9kt @ 1.04% Sn located just 18km from Metals X’s 50%-owned Renison tin mine. With Metals X actively pursuing regional M&A, we see Stellar as a logical takeover target and believe the shares offer significant upside.

With all eyeballs on gold (and copper), it's worth noting that the tin price has also been moving higher, with unstable production coming out of Myanmar and Indonesia suffering disruptions. SRZ's Heemskirk is approximately equivalent to 3% Cu, 4.5g/t gold (higher at today's tin price). SRZ is looking at ~50kozpa AuEq production over 10 years, which in the current market for gold producers at that scale is worth c. $500 million once in production. Given SRZ is still at development stage, you need to risk-weight that number, but even a hefty discount still leaves significant upside for SRZ shares, and any corporate activity with its neighbour MLX could bridge that gap fast.

The tin price is on the move, let's see if SRZ follows.

Scarcity: Stellar's Heemskirk is the highest grade undeveloped project in Australia, and third highest grade undeveloped project globally.

There are really only 3 advanced-stage tin projects that exist in Tasmania/Australia - the operating Renison mine (50% owned MLX), Elementos ELT's Cleveland Tin project (20% owned MLX), and Heemskirk (100% owned SRZ).

Synergies: Heemskirk is 18km down the road from Renison, 50% owned by MLX. With the same type of ore, tin hosted in Devonian granites, and existing processing infrastructure with ore sorting capability at Renison, this is a no-brainer tie-up. Economics at Heemskirk, which already look good (on a standalone basis), would be enhanced if they could process ore at Renison, unlocking significant synergies. Heemskirk has an unencumbered offtake, which would be attractive to an acquirer like MLX.

For years, MLX's primary growth project has been the capital-intensive Rentails project to recover residual tin/copper left in historic tailings from past mining. Tailings reprocessing projects are notoriously difficult and in our view, often underwhelm on economics. The market has typically poured scorn on this, preferring MLX to use its large cash balance to buy back shares or pay dividends rather than save it up to fund Rentails.

The core cash generator for MLX has been its stake in Renison which has printed $144 million p.a. in operating cash flow over the last 2 years. Heemskirk is analogous to Renison, so we think it would be well received by the market if this deal eventuated. Then, MLX could expand its tin production without compromising its 9 year remaining mine life, and stay on strategy (proven people/capability, underground mining), and you get ascribed a premium market multiple, like the Capricorn's (CMM) and Genesis' (GMD) of the world.

MLX currently trades at a $1.05 billion market cap. Buying SRZ could propel MLX to index inclusion, and drive an institutional re-rate.

In a recent interview, MLX executive director Brett Smith said:

"Our (acquisition) criteria would be: relatively low country risk; reasonable grade; or low cost to boring into production, for us to be shortlisting projects. And a reasonable way through permitting." He also said that "of course, Stellar is interesting".

Smith also said that he doesn't understand why Stellar would use the Avebury nickel processing plant, an option currently under consideration. when they could put ore sorting in, crush, screen, and truck to Renison for much cheaper operating costs. So he seems amenable to doing a deal, either at the asset level, or at the listed company level.

Metals X has already been active in M&A, acquiring a 19.75% strategic stake in Elemontos (ELT) which has the Cleveland tin project in Tasmania and the Oropesa tin project in Spain. MLX agreed to participate in ELT's entitlement and placement on 20 November 2025 to maintain its 19.9% stake in the company. MLX also bid for 28% of JV Partner Greentech (only got 3.11% acceptances). This follows a global tin M&A landscape that has seen Alphamin's Bisie and Moroccan developer Atlantic Tin attract corporate interest.

Gettable: a predominantly institutional shareholder base (no strategics) is likely to be supportive, and ~18% shareholder Nero has been publicly vocal regarding SRZ's strategic value to nearby players. Stellar's neighbour MLX is well capitalised with a market cap of $1.05 billion (@ $1.19) and net cash of $231 million.

A deal has rarely looked as attractive as it does now since Simon Taylor (known dealmaker) took over as CEO of Stellar on 1 April 2024.

Valuation:

Stellar published a scoping study which showed a post-tax NPV of $122m at a $28,000/t tin price. At spot tin prices, we estimate the NPV jumps to $405 million. Importantly, the project has standalone value without relying on a takeover.

On top of this, we understand that the PFS will incorporate a larger processing plant, which improves the economics further. The scoping study at the lower mining rate supported a 12 year mine life, but SRZ has since expanded the resource and upgraded its confidence, so a substantial mine life can be retained at a higher throughput.

Trading at 0.25x NAV, MLX could offer a premium and still do well for itself, especially when you consider the significant boost to NAV if you strip out the capex associated with building a new mill vs trucking to an existing one.

5. Emeco (ASX: EHL)

$1.28 share price, $667 million market cap

I'll keep this one short and sweet. This mining equipment rental business trades too cheaply at a 25% discount to forecast NTA (see here). We're not the only ones that have spotted this, with the company noting media speculation on 15 September 2025 that it may be in discussions relating to a potential control proposal for Emeco. Emeco's response was telling:

"Emeco confirms that it has received unsolicited interest from a number of potential acquirers and has had discussions with those parties. However, at this time, no party has put forward a proposal which warrants being progressed to a binding proposal."

Where there's smoke, there's fire.

It doesn't matter to us whether or not a formal takeover bid materialises for Emeco, because the company has reduced its debt pile significantly, refinancing the remaining portion, and a 19% free cash flow yield means that the capital returns (dividends or buybacks) hose is likely to turn on and pay us via dividends or buybacks. All this underpinned by robust demand from mining customers, led by Australian gold miners, and other commodities that have been following suit, moving higher in recent times.

EHL is a top 5 holding in the Seneca Australian Small Companies Fund.

6. Rivco (ASX: RIV)

$1.46 share price, $232 million market cap

Rivco (RIV), formerly Duxton Water (ASX: D2O), holds 59 gigalitres of water entitlements in Australia's Murray Darling basin, and allocates them to irrigators (farmers), which provides an income stream that is uncorrelated to markets, and a steady 7.3% grossed up dividend yield for shareholders.

Until now, institutions have had no reason to look at Rivco. It has operated as a listed investment company (LIC), which have fallen out of favour with investors, often trading at a discount to NTA. Concurrently, a couple of La Niña years in a row has meant ample rainfall and subdued water entitlement value growth. Both of those factors have now changed for the better.

Scarcity

RIV is Australia's only listed water investment company.

Water rights are a niche asset class, with the majority ~90% of water rights are held by irrigators, and small selection of fund managers. There's Argyle (40% Regal owned), Riparian (40% Pinnacle owned), and Kilter (61.5% Regal owned). And then there's RIV, which has further scarcity value being currently the only listed ASX company that solely invests in Australian water entitlements, with a focus on the Murray Darling basin.

We think RIV could emerge as a takeover target for an asset manager, such as Regal Funds Management (RPL) who has been increasing allocations to water funds and is publicly bullish the sector.

Synergies

Given the liquidity profile of water entitlements (not as liquid as equities, but there is a trading market), the easiest and fastest way for these fund managers to grow is by acquiring a portfolio of assets in one fell swoop, and performing capital raises as needed, rather than continuously trying to chase inflows, and noting that Pinnacle (PNI) already has a foothold on the only other manager (Riparian) that Regal isn't involved in.

In November 2024, Regal Investment Fund (RF1), which is Regal's 'fund of funds', lifted the water strategy allocation to 10% from 5%, citing government buyback tailwinds and a drier outlook. For context, the Water strategy was first added in August 2022 with an initial allocation of <5% of NAV. As at 31 July 2025, Water sat at 11% of NAV, with a mandated allocation range of 0-25% of NAV. Regal's investment committee is bullish water and Australian retirees' seemingly insatiable appetite for uncorrelated yield, so it's an easy sell.

Regal owns 8.7% of RIV, the largest shareholder in the company, and under the new company structure (we think Regal pushed for internalisation), we think it's possible they make a takeover play for the whole company, given its size at $230 million market cap, latent value on offer, and it's gettable - they can probably offer a modest premium to NAV and shareholders would take it.

Gettable

Since listing in 2016, RIV has been externally managed as a Listed Investment Company (LIC) by Duxton Capital. In 2025, shareholders have voted through a change to internalise the management rights by effectively paying out the manager early via a $3.3m termination fee plus a transitional service fee of $0.23m for 18 months. For an upfront cost, this reduces the fee drag on RIV returns. The company then changed its name from Duxton Water to Rivco Australia Limited, and is now an operating company.

This is a game-changer for aligning incentives. Managing an LIC, your incentives are to collect fees on the asset base, not share price performance. Whereas under a company structure, the company is more likely to realise value for shareholders. This could include initiatives like asset sales, a share buyback (previously this would just reduce fee-paying FUM), and more active analyst marketing.

We saw the same thing happen with Global Data Centre Group (GDC), our first ever Good Research report (back in 2024), which was also a Listed Investment Company (LIC), before internalising management rights and undertaking a 'value realisation' strategy. This involved selling its assets to third party buyers at significant premiums to carrying value and shareholders benefited handsomely.

As a result of its history, RIV is only covered by a couple of smaller broker (no brokers want to cover LICs), and flies under the radar of investors.

Valuation

RIV trades at a 17% discount to pre-tax NTA, and a 8% discount to post-tax NTA.

This comes despite the fact that we believe we are entering into a cyclical bull market for Australian water entitlement values.

Dams are dry, peers are reporting increasing water entitlement values, and the spot water price has doubled over the last 12 months, but RIV has been flat. While acknowledging that weather is a somewhat unpredictable external risk, conditions are dry in the Southern Murray Darling Basin - prices have risen but are likely to rise further.

Water demand is underpinned by structural drivers, with increasing Murray–Darling Basin acreage dedicated to high-value permanent crops such as nuts, citrus, and grapes. These crops are water-intensive, and almonds alone are expected to account for an 18% increase in water use in the Southern Murray–Darling Basin by 2030 (per the Bureau of Meteorology).

Last time Dams were at this level, <60% full, the RIV share price closed the gap to NTA over the subsequent 2 years, with shares returning 20% p.a.

If one of these asset managers doesn’t act soon, we think the discount to NTA could close regardless. The Australian government is undertaking an aggressive buyback program of water rights. RIV received $121 million in 1H25 from the sale of 30,614Ml of water entitlements to the Australian government, this enabled the company to repay $108 million of its loan facility, effectively extinguishing debt. Importantly, this asset sale was done at an estimated 23% premium to book value, and highlights the latent value potential on offer across the portfolio, especially considering RIV currently trades at an 17% discount to NTA.

Phil King, if you’re reading this, we'll take $2.00+ for our RIV shares!

If we're wrong about the takeover thesis, we like RIV as an uncorrelated growth + yield play with 20-30% upside regardless of how markets perform in 2026. While we wait, we get paid a 5% fully franked dividend yield (~7% grossed up), with a long history of increasing dividends.

Disclosure: in case it wasn't already obvious, we own shares in these 6 companies in the Seneca Australian Small Companies Fund. 

Final word

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