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Gold/Mining/Energy : Avenor (avr-tse) - Repap buyout (rpp-tse)
AVR 3.830-4.5%12:20 PM EST
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To: tk who wrote (23)1/15/1997 7:59:00 PM
From: Andre Koluksuz   of 290
 
There were a lot of blocks that Nesbitt Burns was downloading today. I believe they drove the price down to get out of it. For those of you like me who took this opportunity to buy more, we'll be laughing at the end. The company has a book value of between 4.50 and 6.00 according to various brokers' estimates.Repap's share price is an excellent example of how the investor emotions (fear in this case) is the single most important factor which determines the price. Who cares if Avenor buys them or not. There are few American and European forest giants who are waiting for the dust to settle. They may easily offer 5-6 bucks (cash) a share and buy Repap. Nobody is stupid.Under normal circumstances they could not dream of buying such an asset for that price. I also agree with the argument that no pssibility of bankruptcy. That would be shooting oneself in the foot for the banks. Repap just recently increased the price for its products due to the market turnaround. Let us not forget this company made 150 M net profit in 1995 when the price of paper was higher. No matter what Avenor shareholders do, it will be the "new" Repap shareholders (who managed to get in below $4.00) who will make the most.
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