Australian Strategic Materials (ASX:ASM) shares have soared +120% higher in the Wednesday session after the company received a surprise buyout offer from Colorado-based uranium and REE player Energy Fuels.
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The proposed takeover offer is obviously one investors are bullish on – just look at price action – and a look at the company’s 5Y price chart might explain why. Australian Strategic was firmly put on the map in the COVID years when the price went stratospheric (relative) in CY22, approaching the $13/share mark.
This was to be short-lived. Since then, the price hasn’t done much apart from one little window last October, during that Albo-Trump critmins meeting.
So it appears as if a buyout from Energy Fuels is the best way to reclaim value and, ultimately, ditch the investment – and while sentiment insofar as price action goes appears positive, not all in the HotCopper forums were pleased.
One user simply remarked: “WTF”. Fair enough, really, if you had high conviction on this stock going places, but a more longitudinal chart does suggest the stock lacks momentum (or motion, if you will). And management may be thinking the same.
The board are unanimous in viewing the takeover as a good thing, and it’s worth highlighting that while ASM might drop out of portfolios, they are eligible to pick up “0.053 Energy Fuel shares or CHESS [CDIs] for each ASM share held,” and/or, “up to A$0.13 in cash per ASM share” as an unfranked dividend. The takeover will create a combined group, of which ASM’s ownership will be just south of 6%.
The aim here is something I’m bored of writing about, and you should be able to figure it out for yourself if you’re masochistic enough to regularly read my articles: Rare earths, Western countries, supply chains, China divorce, etc, etc.
ASM last traded at $1.59/sh.
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