The company intends to acquire the remaining shares in Advantage Lithium in an all-scrip deal. Morgan Stanley suspects a negative reaction to the news is likely in line with the dilution prospects.

The purchase rationale centres on deterring competition buying the business and impacting on brine quality, but the broker believes this can only be confirmed once the deal is completed.

Equal-weight rating and In-Line industry view maintained. Target is $2.85.

Sector: Materials.

Target price is $2.85.Current Price is $3.36. Difference: ($0.51) - (brackets indicate current price is over target). If ORE meets the Morgan Stanley target it will return approximately -18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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