Cirrus Networks (ASX: CNW) shares are up 30% on a takeover bid. The big question is whether there’s still some life left in CNW shares and absent another bidder - unlikely - there isn’t. So, this is something we can examine quickly then pass over and move onto more interesting things.
The announcement is: “Cirrus and Atturra have entered into a Scheme Implementation Deed under which it is proposed Atturra will acquire 100% of Cirrus for 5.3 cents per share by way of a Scheme of Arrangement” As the Cirrus share price is now that 5.3 cents there’s nothing left in here for us to stag or arbitrage. There is a possibility of a move in that CNW share price: “Cirrus shareholders will be given the opportunity to elect either 75% cash and 25% shares (default option), 100% cash, 50% cash and 50% shares or 100% shares (subject to a scale back mechanism to achieve an overall approximate 75% cash / 25% shares mix)” If and as the Atturra share price moves it’s possible the Cirrus one will. But if we wanted to speculate in the Atturra price we could - and should - just do that directly, not through the medium of Cirrus.
Cirrus Networks share price from Google Finance
We talked before about Cirrus Networks: “The specific is that Nvidia has signed up with Cirrus: “Leading IT solutions provider Cirrus Networks Holdings Limited (“Cirrus” or the “Company”) (ASX: CNW) has today announced a collaboration with NVIDIA to leverage the power of accelerated computing and artificial intelligence (AI) to drive innovation, improve efficiency, and promote sustainability across the Australian resources sector.“
There are three things to say about this. The first is that yes, the natural resources sector is a place where AI could have very interesting uses. Long gone are the days when a hammer and a shovel found interesting minerals on the surface. It's all underground modelling these days. Vast consumption of computer resources. But it's also still something of an art, not a science - that's why everyone has to dig a hole to check the assumptions being made about mineral positioning. This absolutely is one of those areas where AI would be - will be - very useful indeed. We'd expect to find more useful deposits of minerals as a result.”
Clearly Attura has had a look at this and decided they’d like to own that opportunity.
But as for us - given that the share price now fully incorporates that bid price in the absence of any other bidder appearing there’s nothing in this for us.
