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Aren’t we all assuming here that BHP, Et al have no preemption rights? I’d be very surprised if that were the case.
3. Existing Shareholders and Pre-emptive Rights to New Shares
The next step is to check that the issue of the shares complies with any applicable pre-emption rights. These require new shares to be offered to existing shareholders first, in proportion to the number of shares they already hold.
These rights of first refusal over issues of new shares are designed to protect shareholders by allowing them to have the chance of preventing the dilution of their shareholding so long as they have sufficient funds available to subscribe for the new shares.
Rogue.
The resolutions call for up to £17m shares to be issued at a nominal value.
The nominal value is 1p so the actual amount of shares in is 1.7bn
Even in section a, I believe it mentioned £7m at nominal amount so 700m shares.
There won't use this imo, but he worth getting the agreement.
're takeover law generally and share issues, the generally law refers to a frustration of the hostile bid by issuing the shares via a corporate action..
The argument would be that by seeking permission now and then entering into open discussion as a precaution that the purpose of the corporate action is not to frustrate the bid, but to raise money for ?production and long lead items. You could also issue none voting shares, or shares that don't have a voting abi!it for say 6 months. Thereby not affecting the bid per se, but would make any bid less acceptable to the bidder.
Personally I still think an agreement with BHP has been made, but....
Good morning RogueNation, may I suggest it's a really good idea to back this, as it stops us being taken out cheap.
I bet you that the majority of shareholders will back this motion, for that very reason.
Only reason not to back it, is if you want a cheap offer.
Morning iceberg (0806), not sure I understand how one of the resolutions to be voted on is giving BoD the right to issue upto 1bln shares. My initial take was they can issue shares up to a financial value, (together with a cap on aggregate accumulation) if I’ve got that wrong I would not be inclined to back that particular resolution.
Good morning schlemiel, it's simple.
I am in a minority, but I believe that the most likely path is production.
Enjoy life, and concentrate on the rest of your portfolio, and hopefully like my portfolio, your dividends are seeing signs of recovery, and can fund your lifestyle.
If I am wrong, then you get a payday sooner.
But the outlook is the same, enjoy life.
A quick explanation on options: We currently have 2.072 billion shares in issue.
Options are awarded to directors, should they meet certain milestones, resulting in increased value for shareholders ( I don't really like this type of reward, I would rather they invested their own money )
So when certain price points are reached, then more shares are issued, increasing the 2.072 figure, and diluting all shareholders marginally.
Should they fail to reach those targets by the expiry date of the options, then they are cancelled, and no dilution takes place, but then a new set of options with a different date is issued.
bm3121
What's the inference mate? cheers
I don't understand options that well and neither do I understand what we can surmise when options are allowed to expire or reallocated.
I want to see the future but the present evidence doesn't allow for it
Good morning bm3121uk, I believe we have over 100 million shares as options.
However you are correct they are at different prices, and 60 pence are the memorable ones.
But if we get a bid at say a pound, and the price rises to a pound, then those options can be exercised, and we go from 2.072 billion shares to 2.2 billion shares. ( those figures are from memory, so I could be a bit out )
All the best.
A topic that has not been mentioned for quite a while is the issuance of the remaining 60p options due in Dec., 21. Roughly 50 million of the 40 and 60p options expired a couple of months ago. NM has been allocated 35million of those, with several other board and senior management allocated a million or so each. Nothing has gone out to indicate the expiry of these options. Also, BHP is sitting on quite a few million 37p options (tens of millions from memory) so there is already in place a significant dilution to the everyday and institutional holders should a takeover offer ever be put to the market. However, one would expect that none of 60p options will be exercised by Dec 21 should SOLG try and go it alone. My thoughts only.
The Valuestone issuance is an intriguing corporate development but I don't possess the insight or professional experience to work out exactly what Mather's intentions are.
He could have raised the paltry $5m from any party but chose a Canadian based private equity company financed by the Chinese State. Why the Chinese? Why not the Aussies (BHP or Newcrest)?
And why did he raise only $5m? It's a pitiful amount of capital to raise for a company of SOLG's size. What's the purpose of raising such a small amount? Is he signalling future developments
Feck me, it's doing my bonce in. I'm searching for answers and I can't find one, not one and that 's frazzling my tiny brain
Hi rcgl2, I think your summing up is correct, and yes the scenario you paint would be interesting.
But it does two things in reality.
First: I think the actions the company are taking makes a bid almost impossible at this stage, and so it won't happen.
Second: If I am wrong, and using your scenario, and say BHP offer 1 pound a share, and the company issues 500 million shares.
Then the share price still goes up, just with the dilutive effect, share price may only reach 80 pence.
So it will be an exit point and defended at the same time.
Lastly, what makes anyone thing that the other stakeholders would take a 1 pound bid. Some investors are looking at this from personal gain.
Someone please tell me why NCM and others, would sell their stake for 1 pound a share, when for no extra investment, they get a percentage of Alpala, and every other project we bring to fruition. ( that wouldn't make sense to me )
All the best.
Feel like this discussion is conflating two different scenarios. In the normal course of things, agreed the company can issue and allot shares to new holders which would dilute down the major shareholders. As iceberg says the resolutions give authority to issue new shares and disapply pre-emption rights. I agree with you here Quady, it could be used to keep parties at bay.
But I think in the context of a formal offer being made or about to be made, the takeover code would apply and company can't just frustrate it with share issuance.
Imagine if BHP offered £1 a share and you were keen to accept. Then NM says surprise, we've just issued 500m shares to a few other institutional holders so not only is the £1 a share off the table without you all having a chance to vote on it, but your existing shares are now significantly diluted. But don't worry, you're still on track for jam tomorrow.
Again, this situation is reminding me of a Dave Allen sketch.
This is where all the world's leaders launched their weapons.
Dave emerges from a drain hole, looks around at desolation, similar to an abandoned mine site and shouts , "WE WON", i e. NM still controls a site and has spent so much time and money defending it, that nothing has moved.
As for being the only one to move this forward the quickest. REALLY.
DYOR
GLA
So much can be done to defend Solgold from a takeover.
1) A diverse book.
2) The issue of more stock, excluding the main holders.
3) Bringing in more parties, at nominal holdings, to make the book more diverse.
4) Proving up other tenements.
5) Announcing a good PFS, and improving the NPV of Alpala.
6) The announcement of a conditional funding package for Alpala.
7) The commencement of work constructing Alpala next year.
As shareholders, we must continually ask ourselves, why no bid. NM is telling us constantly, we are going to production.
Vote with NM, and reap the rewards. I will add, that this is my opinion, to make some people happy, but in truth, everything here is opinion.
Yes Quady, tha is what I would say if I was trying to maintain control and fend off low bids.
But it doesn't make it true.
GLA
DYOR
Hi newtoit. I fully accept that, but it has been said twice now, that I can remember in webinars, no one can bring this to production faster than Solgold.
Hi Quady.
I appreciate that the government benefits from revenue not shares. What I was pointing out was that that government want this to be productive very soon to receive income, not an ongoing defensive dealing situation that could run for many many years until the licences expire, when we lose the lot.
DYOR
GLA.
Morning Iceberg, the resolution, will be passed, this is how companies are defended. If we were distressed, then there would be no point, as such a share issue would fail. But many other actions can be taken in concert, to keep a bid being successful. Keeping the book diverse, is NM's masterstroke, and is what is going to eventually give us a payday of significant value. Let's see how this develops. I am amazed, that so many experienced investors have never come across situations like this before.
ToS a good question imo. The key to it are the resolution s put up for voting at the AGM next month
Specific resolutions are being voted on to issue (from memory around 500m-1bn shares), also a specific resolution to only match existing share holders to a certain percent.
If these get voted then the company can issue these shares and the likes of BHP and newcrest be damned!
There is no point putting these resolutions in unless Nick is confident of them passing imo.
Read the Fortune Oil saga, that's exactly what happened in reverse. Two families got shares that were issued, issue after issue, everyone else excluded, and company taken private, one year after issue, once they achieved 75%. The share price stagnated, It happens.
Hi ToS1963, that's exactly what has happened with last two issues, BHP and NCM were excluded.
Agreed addicknt, target company is not allowed to take action to frustrate a bid once it's been made and before shareholders have had a chance to accept or reject it.
Q, no they can't. I suggest you have a look at Rule 21 of the Takeover Code - it explains what actions are prohibited if a company is subject to a hostile takeover.
Any significant defence action requires shareholder approval, and that simply wouldn't happen. Additionally, a major event such as an asset sale or share issue of the size you think would work, would require a full prospectus.
Sorry, you're hanging you hat on a coat stand that has no hooks.
Hi Quady....
You stated that “Let's say BHP make a hostile bid, we can issue another 500 million shares to everyone else apart from BHP, at the price that BHP bid,”
Not sure that’s true. All shareholders... BHP included.... have to be treated equally. How would you like it if they issued everyone extra shares except you?
Anyway, on another point, I have been avoiding this thread for a few weeks due to our ongoing infestation problem, pleased to see we seem to be avoiding that this weekend at least. Long may it continue.
It doesn't matter newtoit, the revenue the government get is through tax, not shares.
They just want it in production.
Don't get me wrong Montecristo, I could be wrong and we get brought out cheap.
But I am just looking at this share in a dispassionate way, and the mostly likely outcome.
If the book was less diverse, and BHP owned 40% of Solgold, I would think Solgold taking this to production, as highly unlikely, as BHP could acquire another 10%
However that is not the case.
All the best.