Does this present a Takeover opportunity for you?
Will this deal go wrong, or will Randgold Resources shares rise even further?
- Randgold Resources agreed to a 33/66% $18bn all-share zero premium merger with Canada’s Barrick Gold.
- The combined company will be the world’s biggest gold producer ($10bn revenues, adj. EBITDA $4.7bn)
- Shareholders will get 6.128 new Barrick Gold shares and are still entitled to 2018 $2 Randgold dividend.
- Merger is expected to close by Q1 2019, with Rangdold Resources shares to be delisted upon completion.
- Will the Randgold shares rise further on the potential excitement from this merger?
Trading Rangdold Resources – An Example
Let’s say you think that Rangdold Resources shares would rise further as a result of the takeover offer. You decide to buy exposure to £10,000 worth of Rangdold Resources using a CFD, at the current price of 5,230p. To do this, you need £2,000.
For the purpose of this example, let’s assume the Rangdold Resources share price rises by 10%. Your profit would be £1,000, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Sentiment towards the deal sours and Rangdold Resources shares fall 5% and hit your stop-loss. Your loss would be £500.
This is provided for information purposes only. It should not be taken as a recommendation.