Company requested suspension of trading on Hong Kong Exchange this AM, pending the release of price sensitive information.
This information was posted on the Hong Kong Exchange web site.
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.
I like the idea of international expansion as being more of a China only play brings price controls into the mix a little more than I like and this will open the global doors wider hopefully.