It appears that the transaction/sale of the silicone business is proceeding according to plan.
If the transaction price had fallen outside the book value range used in the sensitivity analysis disclosed in the company’s annual report, the company has stated that it would have been required to inform the market. Such an announcement could still occur, but it is reasonable to assume that we are likely past that point in the process by now. This provides comfort regarding the valuation.
In addition, Chinese DMC prices seem to have stabilized at a higher level, which supports the transaction.
I believe the company will announce the sale of the silicone business during this quarter, with the transaction being completed in the second quarter of this year.
The upside is in the range of NOK 45–55 per share, while the downside is a potential halving of the share price if the sale does not go through. Based on the company’s consistent progress updates and the information from yesterday’s meeting, I believe the stock should be held going forward.
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The user Nidaros_scout has a position in OB:ELK. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
