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Yes thank you for clearing that up
Bakered, please read carefully. When I said 7-8x, I was referring to EV/Ebitda multiplier, not PE. In fact copper majors like Anto are trading at close to 9x EV/ebitda; even highly geared First Quantum is trading at 7x whilst KAZ is only at 5.8x. I prefer EV/ebitda over PE because the latter can vary significantly across peers and is more accounting-based (eg. GLEN reported a loss, so no PE). If we are talking PE, then I said 8.9x was very low, even compared to the fellow Kazakh copper minnow CAML which trades at 15x PE, not to mention the likes of ANTO (77x), FCX (93x), SCCO (38x), OZL (35x) or polish KGHM (44x) - you get my point...
Shaktar please clarify. PE 5.8 below peers at 7 to 8 then PE 8.9 still well below peers. Does not make sense. Also gradual decline in share price is a bit f a concern do you think?
I'm amazed how desperately they are trying to downplay these awesome results. The change in the tone of the report is so obvious. Gone is "lowers cost producer globally" replaced by very dry factual statement, completely disregarding that 64c/lb is THE lowest cost in the world, I'm sure of it. Note how they are trying to avoid uplifting words like "increased" or "beat" as much as possible - Mr. Southam choosing to say "saw the Group REPORT ebitda of $1.4bn". Come on, give yourself a praise like you did all those years, don't be shy!
And of course note how they decided not to pay the dividend - anything to try and push the price down. They didn't have to do it, the Nova's offer is post-dividend anyway (that is 780p less any dividend paid), so they could pay a dividend, nothing requires them not to - they chose to do it to create some negativity in their otherwise GREAT results with the sole purpose to try and push the price down. Despicable! The CEO and all the non-execs deserve to be fired! I know how I'll be voting at AGM
ok, that was operating profit of $1bn. net profit $639m, so PE 8.9x, still well below peers
The best surprise is the cash cost of production. At today's prices KAZ makes $8100 for each tonne of copper it produces. So this year they could be looking at $2.4bn EBITDA at today's price, and that's without Aktogay 2. That is huge!
EBITDA $1431m, Net Profits $1 billion!!!
Net debt down to $2.6bn against expectation of a rise to $3bn
Cash cost only 64c/lb - that's huge surprise, down from 77c/lb from previous year! Amazing!
So, KAZ is trading on PE of just 5.7 and trailing EV/EBITDA of just 5.8x (against copper peers trading at 7-8x!!!
CHEAP CHEAP CHEAP (IMHO)
Nova's takeover attempt is surely dead now!
Oh, and if anyone doesn't like taking that risk of having to sell for 780p, I would suggest you sell today at 847p so to give an opportunity for someone who (like myself) thinks this company is undervalued at today's price to buy those shares. That is important because those who buy now surely will not be accepting the offer, so the more people sell now at a price well above the offer price, the higher are the chances that Nova will not get to the all important 75%
The key part in that quote is "we've got the necessary votes". Problem is Nova doesn't, and the question remains if they can get to the magic number - 75%. If they don't get the necessary 75%, they cannot do anything and the company will remain listed in London and you'd be able to sell your shares any time, just like now. If they do get 75%, then they can take the company private, and yes it will be difficult to sell your shares, but that doesn't mean that minorities will not be protected. The company will remain a UK company, subject to Companies Act, and also for 10 years will continue to be regulated by the Takeover Code, both of which offers reasonable protections to the minorities.
The same Takeover Code, incidentally, requires that bidders provide a minimum of 14 days for shareholders to make up their mind once they've reached the magic 75%. So, if Nova do get to 75%, we will all have 14 days then to decide whether we want to keep our shares and become a shareholder in a privately held company, or whether it would be then time to accept their offer and sell shares, at the same price that others are getting. That's 780p now, and cannot be lower now under any circumstances.
I'm keeping mine, at least for the time being. No advice intended. DYOR
That’s a very good question. Does anyone have anything to say that this could not happen here?
Whilst copper price is now considerably higher now than in 2018 and the share price hasn't yet returned to those levels I am nervous about whether these insiders can force through a takeover. I've just been forced to sell another Russian commodity play VGAS at a disadvantageous price. In that case the bidder is telling holdout shareholders "we've got the necessary votes to take the company private ; we won't even be compulsorily buying your shares at the (low) offer price .... but good luck trying to sell when there is no liquid market". Because of the inadequacy of protection of small shareholders what's to stop Kim & Novochuk doing the same here
Shakhtar
Since the offer was made kaz share price has moved from 630 to 850 almost 35% up. so well done to all who did not sell out. I think given the copper price the takeover bid is bound to fail and we should be looking at another 35% appreciation from here.
Looking to close over $4.20 more upside to come....
ATB
Bottled
Not heard from H&L
I received my offer papers almost a fortnight ago. It seems the delay by H/L in submitting the bid docs to their clients (I'm not one) is curious to say the least. On all we know ,surely Messrs K & L might be disappointed at such a delay. Is there a deliberate agenda behind this,one wonders? Does anyone here read anything into the delay? Personally,I'm not accepting the bid as things stand - but others might and ,well , the cut off date is getting nearer. I was pleased to read Sollo's mail re non-submission = default/non vote....any broker acting otherwise would surely be out of order....all interesting stuff.
That's Perfect! thank you Sollo,
ATB
Bottled
Bottled if you do not answer ya or na then the default takes over my wifes broker says if she do not answer the default is a no vote
With regards to the valuation of the offer, it seems that Koksay project (which is being delayed without a credible explanation - likely "overtaken" by the very risky russian venture) it's not accounted for in the bid price (as other aspects previousely mentioned)
Good Afternoon Righton
I rang HL yesterday as rather bored, the gentleman there said he would find out when the offer letter would be send out and send me a message letting me know........... of course he hasn't.... having just seen your post I have just send them a message via the website asking them what is going on... if something comes through I will post it.
ATB
Bottled
Back in early November, I wrote to H-L to ensure that my vote (against) the deal would be counted. They wrote back saying "We are currently waiting for more information on the Kaz Minerals Scheme of Arrangement but will be writing out to Shareholders in due course regarding how you can vote and take part in this Corporate Action". I wrote back recently and received the following " We have been waiting for a firm timetable of dates for this corporate action but will be writing out to Shareholders regarding this shortly".
Has anyone heard from H-L? Is the vote taking place? Does anyone know ?
Hi Shaktar, I like your posts. Let's do sum [SIC]maths though....£2.3bln FY19 revenue divided by, Let's say 2.6 average for copper, times 4.2, thats a 60 % increase. Correct my copper prices but that is over £1bn of extra cash pa and most of that will become net earnings. £20 + venture value IMHO
Copper up another 2%. KAZ shares up a few pence, keeping steady progress up - another day of trading with more people buying well above the offer price. Steady towards rejection of the offer. Can't wait to results this week.
bottled I think you will find Kim & Novichok only have just over 39% and as they have put a bid in cannot increase their holding. the only way they can legally get more shares is by some-one else buying up shares and joining them.
Hi Ratsuss
I do hold a chunk of Glen as used to trade Xstrata , I sold 2/3rd of my holding ages ago and increased my position in Kaz. the problem with Glen is their forward hedge book. Fags never traded have thought about it, the strikes have put me off. I really can't see a downside in holding out on this bid, as i expect it to get shelved and Kaz have an upward correction or worst case have an increased half decent offer.
ATB
Bottled
I wouldn't switch from KAZ into other copper players, I would stay put and reject the offer. Nova's bid provides a nice protection from the downside risk. I agree with the view that copper is just entering a new super cycle, but it's not going rise in straight line, and a correction will come sooner or later. Holding KAZ is a great way of limiting your downside when correction comes whilst keeping exposure to the long term copper growth. That's my opinion...
Having said that, I do believe copper price has some way to run yet, even in this first leg up, before any meaningful correction. IMHO, I see copper reaching $4.6/lb by April-May time before correcting. I agree, Nova couldn't have picked a worse time for their offer. It's becoming quite obvious now that no shareholder in their right mind would accept the current offer. Nova would then increase their bid to 880-900p and extend the offer period beyond the current deadline (which, incidentally, is 9 March). They are allowed to keep the offer open for 60 days, so 8 April will be the next and final deadline. I don't think shareholders would budge, though, and the bid will fail then, just weeks away from the AGM in May.
I see big changes coming, as shareholders would be coming to the AGM with their anger at this whole debacle being very fresh on their mind. They will likely make their feelings known to the not-so-independent directors through their votes, and at the very least the CEO, Mr. Southam and the Deputy Chair, Mr Lynch-Bell can expect to lose their jobs. I wouldn't be surprised if other NEDs get 30-40% of votes against their reappointment. The company would have to respond by replacing most of the Board. Mr. Kim and Mr. Novachuk would of course vote themselves to remain on the Board, but I cannot see Mr. Novachuk remaining as the Executive Chair. The Board would need to be reconstituted with fresh independent faces.
And, importantly, the true value of this company will start emerging (starting with the results announcement this Thursday) as 300kt of copper produced at the lowest cost globally (!), and going soon to 370kt with the start up of Aktogay 2, is truly a cash machine worth noting, particularly when copper prices are about to go into all-time record territory. If copper rally continues, I see sp reaching £12-14 range within this year.
DYOR and GLA
afternoon Vince my Barclays account want a reply by 05/03/2021