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Good luck for this afternoon everyone, the Hooch seems to be up early today, maybe he knows something.
I'm looking forward to your comments already, Hoochy. I think you're closer to the mark than most.
Ok looking forward to it hoochy ......
Struggling to see any worse case scenario.
In many people's minds the 'worse case' is that no deal is announced, however we now know that there were at least 3 (maybe more) non binding offers, and we know at least one of these (maybe all of them) were at a level to broadly satisfy the BOD enough to seek to move towards binding. The worse case now therefore is that 'no deal is agreed' rather than 'no offer is made' - two quite different situations.
So, in the event that no deal is announced (unlikely IMO), then it may still be possible to 'share' the details of these offers. I appreciate there will be NDA terms to consider, but the offers would find a way of coming out, they always do, just may take a little time and be done in a not so obvious and roundabout fashion.
From a quick search, I found the following 10 step regarding acquisitions. I think the non-binding offers is step 6 and we are waiting for step 8 which implies that due diligence (DD) is what has been taking the time. When we consider there were multiple non-binding offers, there are potentially several parties having to carry out DD before making a final offer.
1. Develop an acquisition strategy – Developing a good acquisition strategy revolves around the acquirer having a clear idea of what they expect to gain from making the acquisition – what their business purpose is for acquiring the target company (e.g., expand product lines or gain access to new markets)
2. Set the M&A search criteria – Determining the key criteria for identifying potential target companies (e.g., profit margins, geographic location, or customer base)
3. Search for potential acquisition targets – The acquirer uses their identified search criteria to look for and then evaluate potential target companies
4. Begin acquisition planning – The acquirer makes contact with one or more companies that meet its search criteria and appear to offer good value; the purpose of initial conversations is to get more information and to see how amenable to a merger or acquisition the target company is
5. Perform valuation analysis – Assuming initial contact and conversations go well, the acquirer asks the target company to provide substantial information (current financials, etc.) that will enable the acquirer to further evaluate the target, both as a business on its own and as a suitable acquisition target
6. Negotiations – After producing several valuation models of the target company, the acquirer should have sufficient information to enable it to construct a reasonable offer; Once the initial offer has been presented, the two companies can negotiate terms in more detail
7. M&A due diligence – Due diligence is an exhaustive process that begins when the offer has been accepted; due diligence aims to confirm or correct the acquirer’s assessment of the value of the target company by conducting a detailed examination and analysis of every aspect of the target company’s operations – its financial metrics, assets and liabilities, customers, human resources, etc.
8. Purchase and sale contract – Assuming due diligence is completed with no major problems or concerns arising, the next step forward is executing a final contract for sale; the parties make a final decision on the type of purchase agreement, whether it is to be an asset purchase or share purchase
9. Financing strategy for the acquisition – The acquirer will, of course, have explored financing options for the deal earlier, but the details of financing typically come together after the purchase and sale agreement has been signed
10. Closing and integration of the acquisition – The acquisition deal closes, and management teams of the target and acquirer work together on the process of merging the two firms
I think that the SINO deal in its current form is history. I would be very surprised if at least a much better financial arrangement is offered if no sale agreed particularly given the length of time this process is taking. A sale with some retention of interest remains my preferred outcome.
Thanks for your response Mjd. Reassuring.
No one is walking away from the deal in my mind for one it has been going on for a long time and secondly the non-binding offers would have had to be within the ball park to even progress to binding offers.
As it stated in the last RNS the deal is very complex and if bidder thought they were paying too much they would have walked long before this stage and the banks would have wrapped up and left.
The longer it takes the larger the offer ,with as some say a bidding war . Its presently a Perfect Storm for this deal and what price will be paid i have no idea but feel its going to be epic and i am erring on a Rowka valuation.
All we have to do is wait , I realise its painful but it is going to be worth it and at that point you will totally forget about all your supposed missed opportunities and just think WOW !!!!!!!!!!. My completion date is by the end of next week by the way and 100% by month end
Have a nice weekend all
Tigra - and in that pre prepared RNS I would also hope to see the offer that the Board turned down, that could provide the medium term base going forward. Sure there would be a drop but if the RNS was well constructed and detailed it could easily off set any small term concerns.
Anyway, I don't think it will come to that, like an earlier poster, I had told myself that I was finished buying here but I added earlier, just 18,300 shares to get me up to a nice round number which suits my OCD needs, typically showed as a sale on here but I assure it was a buy!
In until the end.
Yes I would say it would need to be signed off by the gov. Good thing is the gov is prioritising the development of the region and mining is the core industry that will allow secondary industries to thrive up there, a good example being how the gov is supporting the Fedorova project. Small translated section below and link to full article in case of interest. Good thing is the government are open and approving projects despite COVID.
https://www.google.co.uk/amp/s/rg.ru/amp/2021/02/09/reg-szfo/obem-investicij-v-zapoliare-prevysit-200-milliardov-rublej.html
09.02.2021 15: 31Project: In the regions Came to Fedorova tundra
Text: Alexey Mikhailov (Murmansk region)
The volume of investments in the Arctic will exceed 200 billion rubles
A list of major Arctic investment projects that will receive government support has been approved. It includes six projects, four of which will be implemented in the Murmansk region. This is stated in the order of the government of the Russian Federation dated February 1, 2021.
The largest of them is the construction of a mining and metallurgical plant, which includes two open pits for ore extraction and an enrichment plant, where copper-nickel concentrate or matte with platinoids will be produced on the basis of the Fedorov tundra deposit. The plant, which is expected to begin construction in 2021 and put into operation in 2027, will produce 16 million tons of ore per year.
Recall that today the world's largest palladium deposit is being developed on the Taimyr Peninsula, where up to 40 percent of the world's volume of this metal is mined. With the development of the Fedorov tundra deposit on the Kola Peninsula, comparable in size to the Taimyr Peninsula, Russia will be able to produce more palladium than all other countries in the world combined. The reserves of Fedorova tundra exceed 400 tons of platinum group metals - primarily palladium, platinum and rhodium. According to Deputy Prime Minister Yuri Trutnev, investments in the GOK will amount to 82 billion rubles.
smithgraham, well done for posting the transcript it was good to read it. Some very good reminders in there as to why I’m holding onto all of my shares. I must admit it would be a nice little gesture from the board if they dropped the spare cash as a dividend into our accounts as good will . That would also point to the FSP being nearly completed as they wouldn’t want to give the buyers all of our spare cash.
Happy days are coming, Pete
Don't know if this has been mentioned already, but is it possible that a deal of this magnitude would have to be cleared by some government administrative department before it's announced ? We all know how slow they can be to oblige, and could explain the waiting time.
GLA, Any time now. W.
Thanks Harry that's what I was trying to understand. The mere fact the board has mentioned the non binding offers and they are moving forward with them, tells me that there is an acceptable offer(s) on the table.
Agree CTC, I have always said a lot of work is involved during this period to finalise a deal . There will not be an update just a statement to say the deal is done. All over in a minute.
My guess as to how it has played out:
- Invited to submit offers to UBS
- DD on assets
- Confirm interest and submit initial offers
- DLA Piper brought in once sufficient interest was confirmed
- BOD and potential buyers noting the increase in value of metals (especially Rhodium)
- More parties joining the discussions and submitting offers
- Rule 2.9 announcement - indicating possible move to a binding offer
- Then in December, someone else must have came back with another offer, at which point talks maybe about a consortium structure may have begun, but as the holiday season approached, talks would have naturally been put back until after Christmas
- RNS with FSP updates in regards to non-binding offers in January
Leaves us where we are today, just a little guess, naturally I feel this will be coming to a conclusion soon, I've always thought sometime this month.
I don't think so Lorenzo, that clearly isn't the case here though.
Thanks Harry. What I wad mainly getting at was if the board had only received low ball offers they wouldn't entertain, would they still have to RNS them?
Well they wouldn't have stated that they were moving towards binding from non-binding if they weren't acceptable.
Lorenzo - well pointed out I hadn't thought that, and yes that would make sense
No, DD will have already been carried out prior to a non-binding offer.
I'm guessing a non binding offer is an offer in principle before due diligence and all that is done?
If any of these offers weren't in the ball park of what the BOD were looking for, would they even mention them or do they have to issue an RNS regardless?
Great post CTC
exactly Delferg
Do what Blackrock does.Keep topping up.
Keep the faith, I think it's very close now. Remember BlackRock closed their short positions, so from that I read that they believe it's close too.