Q: Could you provide some insight into what is happening with MEOH. Down over 7% today and also displaying an "R" in red beside the price.
Thank you,
Mike
Thank you,
Mike
5i Research Answer:
Methanex MX has made a very large acquisition ($2B) of OCI NV's methanol business. In the transaction MX will issue some shares, so investors are concerned on the size of the deal and dilution to shares. It nearly doubles the size of the company so is certainly a big bet. MX says the deal is 'instantly' accretive to free cash flow per share. It looks like an OK deal other than the risk of integration of a very big purchase, and of course timing may not be ideal if we see a recession. R typically indicates shares have rights of some sort attached to them.