AZH - Azimuth Resources

[springhill]

Company presentation
http://www.asx.com.au/asxpdf/20120806/pdf/427vn9vc66pmh0.pdf

 

[Gringotts Bank]

Rounded bottom pattern. Should reach at least 57c.

A good entry might be at 48-49.

XAO can't go too far down without first testing 4450, so i think a swing down on the Ords from here is unlikely.

 

[stockGURU]

Arbitrage opportunity in AZH?

On March 28, Troy Resources (TRY) announced that they intended to takeover AZH. The AZH board recommended the takeover to its shareholders. Troy Resources were offering one TRY share for every 5.695 AZH shares.

At the close of trading today, AZH shares were $0.34 and TRY shares were $2.21. According to my calculations this values AZH shares at $0.388 according to the terms of the takeover bid. TRY now has 64% acceptances from AZH and given that this is increasing on a daily basis, the takeover looks to be in the bag.

Why the discount on AZH shares? Is it because there is some risk, however small, that the takeover won't go ahead?

Assuming the takeover does proceed, buying AZH at $0.34 buys you TRY at around $1.94 instead of the $2.21 that it is currently trading at.

Can someone please explain the disparity in pricing?

 

[skc]

Why the discount on AZH shares? Is it because there is some risk, however small, that the takeover won't go ahead?

Assuming the takeover does proceed, buying AZH at $0.34 buys you TRY at around $1.94 instead of the $2.21 that it is currently trading at.

Can someone please explain the disparity in pricing?

I arb'ed this from Day 1 and closed it for a 6.5% profit. I am surprised that the spread has blown out again.

There are no shorts available on TRY at the moment so that might explain why there is the large spread. TRY rising in the face of falling price of gold might be a sign of shorts being recalled. However, I have no idea why a bid by TRY means recalling borrow stocks - may be the insto holders don't want the arbitrage players destroying their share price?

Of course it is also possible that there is something in the background that we just don't know.

 

[skc]

I arb'ed this from Day 1 and closed it for a 6.5% profit. I am surprised that the spread has blown out again.

There are no shorts available on TRY at the moment so that might explain why there is the large spread. TRY rising in the face of falling price of gold might be a sign of shorts being recalled. However, I have no idea why a bid by TRY means recalling borrow stocks - may be the insto holders don't want the arbitrage players destroying their share price?

Of course it is also possible that there is something in the background that we just don't know.

Well. Offer unconditional. Deal is done... I couldn't find any TRY shorts all of last week, but the liquidity of AZH is pretty low and I would have struggled to build a meaningful position.

 

[System]

On July 23rd, 2013, Azimuth Resources Limited (AZH) was removed from the official list of ASX Limited in accordance with listing rule 17.14, following compulsory acquisition by Troy Resources Limited (TRY).