I'm more than happy to discuss the stock. Good to see the SP is...

I'm more than happy to discuss the stock. Good to see the SP is now up 55% in the year to date. No wonder there's some profit taking.

This is HotCopper, not Sharetrader, so if you have an actual thought or theory about this apparent 'bad deal' A2 is going to be 'forced into', why not share it?

Looks to me like the relationship with Synlait and potential issues around supply have been the main drag on the SP since it topped out around $7.20 last year. It is a real issue/risk and not something made up out of thin air by institutions as you like to suggest.

The financial situation for Synlait looks a lot worse now than it was in March when they got their debt payment pushed back. The market is being flooded with dairy assets just at the time when Synlait needed to sell assets in order to pay down debt. Unsurprisingly still no news about the sale of Dairyworks or Talbot, but with Fonterra's announced divestment plan, it might be even harder to offload other assets as well. Capital raise is a certainty but I seem to recall the max CR amount could only raise a fraction of the amount needed.

Currently, I don't see much more that A2M can do about Synlait mismanagement. They've begun to diversify away, pulled exclusive supply rights, begun working other manufacturers in NZ and are producing some IF and UHT products fully without Synlait now. They don't have a seat on the board and can't increase their stake beyond 20% without launching a full takeover.

If Bright want to inject more capital into Synlait, take on its debt, etc. then go for it. They can't increase their stake without A2M's blessing though. Until they come to A2M with a proposal of some kind, then Synlait is primarily Bright's problem. A2M would be smashed if the China label production was impacted at Synlait, but it would survive and find a way through. The same cannot be said for Synlait. So in my view A2M has the slight upper hand in terms of bargaining when it comes to any proposal that Bright puts forward.

A2M could potentially get a very good deal on Dunsandel, and Bright could takeover Synalit completely and integrate remaining assets more with its overall business.

SP needs to break through $7.20, I'm a bit skeptical that it does that until Synlait is resolved. But that has nothing to do with instos, and everything to do with what actually happens with Synlait.