Value Microcaps Motherboard

[riskanalyst]

LIM - What the heck is going on? The price on the TSX is $23.6, well above the offer of $21.5. That's 10% over the new bid, so market believes a higher offer is on hand for at least 10% more.

On that presumption I went ahead and bought some RNO at 4.84. Xstrata was a steal at 4.5x cash flow on their initial offer and now the stock is 27.5% above their initial offer. RNO offer of 4.30 was at 2x cash flow and currently trading 12.5% above current offer. I would imagine with the deal frenzy we should get more bidders for RNO as well. So risk is short term loss of 12.5% if 4.3 deal closes or I'm guessing 20%+ on competing offers. Likelihood of deal breaking at 4.3 I feel is very slim given the low purchase price relative to cash flow and all cash deal.