Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Yes that's true Spursfan, its not really needed if it does go that way. I guess I was trying to look on the positive side as I can see why it's used negatively. Doesn't mean the shareholder wont win in either case mind, the numbers could be big even if the parties don't quite align.
Hi Skewwy - yep see what you are saying there, largely depends on how the FSP ends though, and if it is with a "Board Recommended Offer" then the share price should re-rate to near-enough the price of the winning bid. It wouldn't then make sense for a "hostile" to accumulate shares in the open market as it would be easier to go public with a counter offer before the vote is passed.
Or the Board could simply suspend trading for a bit, pending the FSP closure/ recommended announcement if they were so inclined.
I think the poison pill can also be used to defend against a potential acquirer who is in the official sale process but who is believed may become hostile if the FSP process is ended without a binding offer. So, if, and I mean if, as it is not a palatable theory, a potential acquirer has made it clear (either officially or unofficially) in the FSP process that they are only going to offer x whilst the board is holding out for z, then the board may become concerned that if the FSP process ends that the potential acquirer may then start to buy up shares at the current SP confident that it will only drive up the price to either x or y (so in between x and z) before it assumes control. The defence is also valid if the FSP is drawing to a close and the Company fears new potential acquirers are waiting in the wings.
I have NO idea if this is the case here, I am only a recent small holder and still at the investigating stage really . But I have seen this tactic/defence referred to previously .
On the positive side it could also mean a deal is very very close and the Company is putting up the shutters to any other hostile bids whilst the preferred buyer is being announced and put to shareholders.
Yes oldspursfan, but how do you stop someone outside the FSP from moving in that manner?, the poison pill. It in effect protects everyone.
GLA
@montmuzard.
Another cracking post.
Keep it up!
MS
"They could have simply left the "negotiating position" comment out, which would have made it look much more like the intention to go-alone was genuine."
Why? This isn't poker. It's more like a trade negotiation between countries. The buyer can see EUA's hand, so there's no point bluffing. This means the buyer knows they have a preferred course of action and the intention to go it alone is secondary. Therefore, it would only be a last resort in the event that they refuse to firm up a higher bid. So, EUA's interest is in demonstrating the concreteness of that option, not pretending that they actually want to pursue it. Arguably, by being so explicit about it - "we don't want to go alone, but we will and can if we have to" - it ups the pressure more than pretending it's their preferred option would. This is especially so because by pretending otherwise they (a) wouldn't look serious to the buyer, and (b) it would demonstrate a lack of respect/trust, which is precisely what is required in a situation like this.
The so called "poison pill" is a red herring. This is a US phenomenon. "Frustrating actions" are not permitted against bidders via the UK takeover code I believe.
Just submitted my vote on such things, it was a very easy decision at this stage of the game.
GLA
Next AGM is scheduled for June? Sorry was going off last year when it was in September! Even smaller window then - and ever more intriguing.
Poison Pill was discussed last night and considered to be effective only in the event that someone is going for hostile takeover via the route of buying up shares - no-one in the FSP is permitted to do that whilst it remains ongoing??
Something else I've been mulling over today - what is the minimum amount of notice for a new resolution to be added to the agenda of a planned General Meeting? Just wondering if this Special Resolution is a red herring, and it's more about getting the GM date in the diary - the real reason for it to be disclosed in the run up (and amended circular issued)?
Is that feasible e.g. 7/10/14 days notice? Are we about to hear big news to vote on very soon?
Great post, thanks Pacha.
To all the good people on here, I love the camaraderie, especially when the vultures land, and are quickly dispatched, by the knowledgeable and genuine investors, may it long continue.
I'm not sure it would make a difference. They're still in an FSP. It is obvious to anyone - including the bidders - that their number one priority is a full sale. To pretend that we genuinely intend to go it alone is a bit silly while still in the FSP. It is obvious that the rights issue is to improve the negotiating position, whether it is stated or not.
Poison pill, as EE posted last night. It gives the ability to -
" At times, it may be enacted to get a higher valuation or more favorable terms for the acquisition"
https://www.investopedia.com/terms/p/poisonpill.asp
GLA
The Directors are confident that the ABILITY to allot securities and DEMONSTRATE a capacity to develop the Kola PGM and battery metals district independently of other strategic options available to the Company benefits the Company and its Shareholders by improving Eurasia’s NEGOTIATING position.
It just seems odd to put this comment in print as it doesn't really strengthen your negotiating position if you are broadcasting that as the intention for the raise. They could have simply left the "negotiating position" comment out, which would have made it look much more like the intention to go-alone was genuine.
Thank you Lenoman -apologies for the couple of typos!! :-)
All the best.
Cracking post Pacha, i agree, the end game is drawing nearer every day now.
GLA
Pacha,
Great summation, cheers.
My take is that the resolution requiring approval at the EGM is needed for possibly the final piece of the negotiating jigsaw.
My reason for this:
1. EGM is 28th April. so the resolution will/should be approved for May onwards.
Quote from the Official Circular "The authority granted by this resolution will expire on the conclusion of the Company's next annual general meeting".
2. EUA corporate calendar is AGM in June each year. So it is quite possible that this resolution expires within 2months of being passed.
So why the rush for the resolution?
Re: page 7 of the circular:
The Directors are confident that the ABILITY to allot securities and DEMONSTRATE a capacity to develop the Kola PGM and battery metals district independently of other strategic options available to the Company benefits the Company and its Shareholders by improving Eurasia’s NEGOTIATING position.
So, we need the ABILITY to allot shares (if we wanted to) to DEMONSTRATE our capacity to develop the Kola PGM district (incl Monchetundra, see page 9 of the circular) to strengthen our NEGOTIATING position.
Now, I have no idea why this would be as the negotiation of this whole FSP, JV etc etc must be hugely complex, but it all "....benefits the company AND it's shareholders" so that is good enough for me.
IMO the endgame is approaching, and this cannot wait until the next AGM because we need to demonstrate this capability NOW.
As I said before, wither way this goes, it is now completely dersiked for me, so time to forget the bots that are more and more desperate and sound like rank amateurs with their poorly worded playground jibes.
Stick to the facts that we are privy to, and you'll most likely not go far wrong!
Exciting times are ahead!
All IMO. DYOR.
GLA.