News

February 09, 2009

As Long As Investors Are Able To Put The Past Behind Them, Peter Hambro’s Offer For Aricom Looks A Win-Win For Both Sides

By Alastair Ford

At some stage you have to set a point of reference. In the case of the ongoing takeover of Aricom the point of reference was set - by the preference of both companies - at 585p per Peter Hambro Mining share. That was the level at which the Russian gold miner’s shares were trading on 4th February, the day before it announced that the offer level was likely to be one Peter Hambro share for between 15.77 and 17.14 Aricom shares. With market expectations duly set, the offer then came in at a reasonable midrange, at one-for-16. That, according to the above point of reference, values each Aricom share at 36.6p,which works out at a juicy premium of several hundred per cent for anyone who called the bottom back in November, when Aricom shares were bumping along at a lowly 6p each.

Of course, you can the shine off that number in any number of ways. For one thing, almost as soon as the share exchange ratio was announced to market Peter Hambro Mining then revealed that it had raised over £60 million at 450p per share, with key directors participating in the fundraising. Bam! – Peter Hambro Mining’s shares plunged back towards the levels at which the directors and the big money bought in. And, bam! – the offer for Aricom looked almost immediately the poorer.

Another way to...