I believe it would be a positive to the PPS. Right now YZC cash has only face value. Buy a competitor and you get all their proven reserves, technology, earnings, etc. Unless YZC take on a ton of debt, the PPS should go up in both the short term and long term, especially in this kind of market.
I guess we can rule out a share repurchase plan if this goes through.
Hard to say if it is up or down for the short term. But int he long run, buying a company at this point is the best thing a cash rich company like YZC can do.
In all likelihood, YZC will have to pay about 50% premium for the company. But it is still way cheaper than what it would be if the merger happened in March! China still relies on coal for 70% of energy production. The technological benefit of an Australia company is also a huge positive for YZC's production efficiency and safety in the future.
Definitely a bullish sign in this environment. Just wondering what the impact with be on the share price. Guess we will find out more information on Monday. I am short the Dec 5 calls @.60 and was expecting to get exercised this month.