That is one helluva deal they just struck. But by their own forecasts, they are expecting 17c per share in attributed earnings. At a PE of ten, that puts the stock around 170. You have serious faith in the transportation logistics industry to be putting their stock on a PE of 50!
Having said all of this - this demonstrates the power of BEE investment companies. They have access to cheap capital and they have companies that have to sell under duress - always a winning combination. I still hold GPL - hoping they will pull off the same
I would say potentially all 3, depends on where you coming from. BUY if you believe in the co being bought. Try to get shares cheap. HOLD if you have shares and have a LT view on this deal. SELL if you want to lock in your profits. Problem with LAB is that they have not been over 30c very much in the last 5 years. Thus, everyone that bought during this time is sitting on some decent profits. So, why would they not want to sell now and lock in profits. Keep in mind that there is R325million of debt. This needs to be financed. Also, if BEE shareholders come in at 150c, there is always the risk that they might not keep their head above water if the share price doesn't work in their favour. PS: I find it very confusing how a co that has not traded very much over 30c the last 5 years can issue shares at 150c. Sounds like a scam to me.