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No, I'm mistaken.
Calamari
PE to PE is slightly different in that the BoD remains in place (we did) and the selling PE house walks away. As the PE house generally owns more than 80% there is only one vote that matters. We had a situation where there was a PE house we wanted and there were some in the process we were ‘worried about’ having as our masters moving forward, but you need the competition. Our current PE house set a value before the process which if breached they committed to give us the decision as they wanted a good home for the business and we had (and still have) an excellent relationship with them (we did make them a lot of money). So we worked harder on our preferred and it is them that broke ranks and everyone was happy.
I cannot see how potential business can bid on say MT without knowing if the flanks license is a 100% certainty ! and surely EUA would not of entered the fsp without knowing this either !
so maybe EUA have documents that say flanks license is a certainty (rubber stamp just needed )
You wouldn't put your house up for sale if it had adjacent land you had bought without the deeds etc !
Rah thanks for providing and no need to divulge further . Thanks for the info and has certainly helped me understand the mechanics of a buyout.
San
NN are also the ONLY bidder imo who could with 100% assurance go for the killer bid, as they out of all bidders have zero issue getting that licence (from the local authorities)
Chris I noticed that we are now 3km from Norilsk, I'm sure we used to be 4km away or am I mistaken? Mac will tell me.
chriszzr, that has been a massive tease for far too long lol
GLA
It has been an interesting talking point and debate, all relevant to our situation at present.
The best part for me, is it has brought to light someone who has first hand experience in such things and has shared it here.
The timeline explanation given is really handy, it gives us all a very good idea where things could well be right now.
Again Raharh, thank you for sharing that.
GLA
I like the way the BOD always highlight the close proximity of the resources to the very large potential purchaser !
"Eurasia Mining plc, the palladium, platinum, rhodium, iridium and gold producing company, operating the established West Kytlim Mine in the Urals, and also the operator of the Monchetundra Project comprising two predominantly palladium open pit deposits, located 3km away from Severonickel, one of Norilsk Nickel's largest base metals and PGM processing facilities, near the town of Monchegorsk on the Kola Peninsula, is pleased to announce that the Company has been granted the Tipil exploration license (24.5km2) adjacent and to the west of the current mining permit at West Kytlim."
PIface, my broker doesn't do MNOD either but I've messaged them to find our what would happen in that circumstance. There would always be the possibility of selling out before the final sale i suppose at just under the sale price, just as long as we're sure that there aren't any more offers coming in.
All bids and counter bids will likely be within the FSP with UBS formally presenting the offeree (EUA) with the offerors best bids - Eurasia do not have to RNS any offers or even state how many there are. They only have to RNS the final offer or let us know that the FSP has concluded and we are no longer involved in the process. It is not impossible but very unlikely that we will see any entity table a bid outside the FSP.
I no I keep banging on about the MT licence etc...
But can you imagine the fear when the Tipil licence landed amongst the bidders - abit like oh **** better move the bid up to the next tier.
I just carn't shake the fact that even if one bidder took it upon themselves to make a killer bid now (Pre MT licence), it would have to be huge or otherwise no point.
As soon as the MT licence lands it would be such a material change that many of the players would completely re-access their original bids & would highly likely trump a (even large) pre MT licence bid.
raharh - very interesting and something which could very well happen here IMO, I do hear what Mac is saying and I get the process, I just don't think the players we are talking about here will be wanting to get into a public bidding war. Either UBS will be playing off one against the other to keep moving the price north until there is just one left or as happened in your example, someone will just come out and say here is a load of cash/shares, we want it now, take it off the market.
Why do it publicly when they don't have too, would be nice for us to watch but could only go on for so long and then you have a very public loser - who wants to be that?
Sanboy - I was (and still am) one of the Exec Directors (i.e. direct in to CEO) and run one of the trading divisions. Obviously not going to divulge any details to identify me or the company, still on the board and I still work at the company in the same capacity, I am just sharing my experience of the sale that happened in the PE world - i dont see this as any different, at the end of the day it is a company sale to another investor, us PIs and the IIs just ride the wave and whilst shareholder approval is needed we would be irrelevant in that vote as we dont hold enough equity.
My role was obviously to present and answer questions on my trading division looking back four years and forward four years (as PE houses tend to work on a 2 - 2.5x return over a four year period - i.e. they will look to move us on for 2 - 2.5bn four years after ownership to another PE house).
Rahrah great post. Can i ask what your role was?
San
Rahrah
fascinating insight, thanks.
Interesting to hear of a 'real life' example Raharh, thank you for sharing that here.
The more sources the better, is my view with these things, to try and get the most accurate picture.
All the best.
GLA
mac - i agree in part with you. Having been involved in a four way sale of a company (to private equity - not public listed) that sold for just over £1bn we had a formal 12 week process that was run by the M&A bank. The fireside chats were happening long before that (3 months or so) lining up PE houses, so they came warm to the table.
The process basically ran as a two week entry process (we had 9 involved) with NDAs and access to data room before initial offers were put in. Anyone below 900m were rejected and we went down to 5. Then we had full day presentations from the BoD to the PE houses that were scheduled in the same week (5 days of my life I will never get back) - one dropped out and did not attend.
From week 5 onwards it was DD and loads of questions.
Closing offers were due by week 10, however one of the PE houses broke rank in week 8 and put a number on the table that the BoD and the current PE house were happy with and the process was abruptly ended much to the dismay of some of the other bidders - but the new PE house got in there with an offer that was above the target sale and sufficient enough to do the deal.
I have a twelve week window in my mind from 1st July but now we are in week 6 onwards, for me we are in the heat of the battle now if there are multiple bidders.
All I am saying is that if someone really wants it and does not want the bidding war an offer could land that sets them apart and basically shuts the process down - which is why it could happen at any time.
All the time in the world to put their final bid across, get eurasia now or never. Not that hard really is it?
GLA
Evidence sways it in the public direction GFD imho. You're right, it might not, but the option is very much there, and it has happened in the mining sector previously.
Removing the PUSU creates greater flexibility to a potential bidders approach, it again, makes it sway to the public final bidding war side imho.
The absence of VTB to date, may also point to something coming over the top from them, if they have a client quietly waiting in the background ready.
GLA
How can it both be “understand they have all the time in the world” and “understand it’s get in now or never”, as that is an oxymoron isn’t it ?
Just checked II also trade NN. As MNOD. I see no reason why it can’t go in an ISA. Current SP is $28+. So 10 for 1 would be good for starters.
Every single one of them who bid, will not bid their max to begin with, that would be foolish if they want to secure what Eurasia have. They will understand it is highly competitive, understand they have all the time in the world, and understand it's get it now or never get it imho. So the 'real players' will keep a bidding war figure set back ready.
GLA
"It's all done behind closed doors under the cloak of confidentiality."
The perfect cover for a BOD stringing out the process till a MT flank licence arrives - no doubt followed by a quick conversations to a certain bidder roughly along the lines of:-
Well you are the top bid, we will recommend your offer & oh yes please remove that cavate of MT licence arrival & remove that 30% discount you applied on your offer - Cheers Thanks.
Thanks Good that answers my question. Thought it had to be public due to price sensitivity of discussions
San