MIN - Morgan Stanley rates the stock as Overweight
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AWE ((AWE)) has indicated Mineral Resources has launched an all-scrip offer, valuing the stock at $484m, a 10% premium to Friday's close. Morgan Stanley notes the market reaction is clear, with market capitalisation losing -$274m or -57% of the offer for AWE equity.
Morgan Stanley observes, although AWE's undeveloped gas assets are not close to Wodgina, there could be opportunities to swap assets with other northern gas producers. Given WA is currently long gas, the timing of the bid appears to the broker to be a combination of opportunistic and strategic intentions.
Overweight. Target is reduced to $20.30 from $22.30. Industry view is Attractive.
Target price is $20.30.Current Price is $16.39. Difference: $3.91 - (brackets indicate current price is over target). If MIN meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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