Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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Example of a Takeover Premium
In August 2017, online retail giant Amazon.com received regulatory approval to take over Whole Foods Market, Inc. in an all-cash deal valued at $13.7 billion or $42 per share. The deal’s value represented a 27% takeover premium on the Austin, Texas-based organic grocer’s latest closing price at $33.06 before the announcement of the transaction.
If we get a 30% premium, that's 36.4p/ share why would anyone pay more?
Because they have to ! The exclamation mark was for Hoochy !
Depends what the true value is, sp at moment not representative of it imo then add 30% to that
GLA
The share price is based on 2.2 MoZ and a bit extra for WK and good will. That will get blown out the water when the big reveal happens !
This a post of mine from a while ago so most have probably seen it however there is a lot of new names here that may not have. I just wanted to share again the potential of what can happen with a bidding war and when someone wants your assets.
I always find this acquisition between two bidders good to read and also shows what can be paid by a Co if they want the asset.
I find it staggering the difference between bids. Throw a third or fourth bidder in the mix and let the fireworks commence. This is a strong possibility with EUA IMO, just takes a bit of patience until a first bid is announced.
Keep in mind this is 2 bidders, we have potential of multiple! And rhodium now about 28k per oz
First bid by Xstrata $4.6bn
counter by Norilsk $5.3bn
counter by Xstrata $6.3bn
Winning bid Norilsk $6.8bn
Making the winning bid roughly 48% higher than opening bid. Anything is possible, especially with the PGM's prices increasing at a steady rate. GLA
We're looking at something in line with the dexter example, multiple parties have been interested for quite some time now, to get it you have to be the dominant bidding party, no ifs no buts about it.
GLA
Yes agree with Dexter and Mac but I won’t be surprised if it goes for higher. GLA
think the BOD would laugh at that offer!
Deano1963
(1) How many mines are there in the world which can say they have 15m ounces PGM plus a potential further of, as pronounced by the co, of 25m ounces. Not many I can think of.
(2) Ignoring for a moment the other metals including Rhodium, we have average price of $1900 between Palladium and Platinum.
(3) Currently, Gold miners are in a similar situation in that big gold finds have simply disappeared.
With gold, the in ground value of Reserve find is $300 per ounce whereas it us $100 for a Resource find.
(4) If you applied similar matrix to EUA :
(a) the 15m ounces at $300 could fetch = $ 4.5B
(b) the additional resource of 25m oz @ $100 could fetch = $2.5B
(c) WK and other metals fetches say 11p per share
(d) All of the above gives about $2.44 which is my target price.
(e) PGM - although an industrial metal, its significance has only just been realised and
(f) There is no reason or other macro or geopolitical reason that PGM cannit fetch similar inground values as gold.
(g) As with gold find, where the prize is bigger, there will definitely be a bidding war - that's one of the reasons I think there has been a delay.
Anything less and I think the management can walk away from the deal.
They probably would laugh at 36.4p but if nobody bids higher we are mining it ourselves and that's not our expertise.
Very entertaining watching day dreamers trying to justify the impossible.
Good post by dexter, but its important to note that first bid was at 6% over the closing price for Lionore. Which gives a closing bid of 54% over closing price. So deano was not talking nonsense like some.
I think the share price is a better indicator of value then some clowns with a calculator... you know who you are!!
Billions
Can you show me one exploration company which may move onto a development phase that has been valued on the basis of a market value of another company's share. They are SIMPLY NOT.
So if you wanted to by Tesla it would cost you 650 per a share if you follow your theory billions.
Bargain as a month ago it would have cost you 1000 per share
GLA
@ prof. The discount rate that is used in the DFS and NPV calculations will be based on market and industry observations. The market value of other companies will be used to infer this.
@ CAW. That's exactly how it works. Funniest post I have read for a while.
Reading some posts here it would appear that the share price is the made up number. It will be the starting point almost every instance.
Deano
And if my auntie had balls she would be my uncle. About as stupid as your comment.
Hi Billions
The discount rate that has been used is UNJUSTIFIABLY high due to the country risk that has been factored in when compared to other countries such as Canada. This will change in my mind, particularly when the country is becoming open for inward investment.
@ prof. Unfortunately non Russian investors will inevitably have the higher discount rate. If it is a domestic buyer then for sure it is less risk and maybe a higher price paid.
The AFC report is the level to go by with maybe an uplift for multiple bidders overpaying. We can uplift for metal prices but in reality long term prices are used rather than spot.
Double the AFC price would be amazing imo.
Bottom line is at this stage of proceedings, no comments on this board will change the value of the deal.
Watching the share price go up from from July's opening at 15p was exciting, seeing the value of your portfolio increasing is fun but at the end of the day we all knew that wasn't our goal, our goal was to see our portfolios once a deal has been completed.
The BOD know what they have, the buyers will have full transparency in what they are being given access to should they want to buy it.
Highly likely to be a bidding war with all the limited information that we have been given, factoring in rises in the value of our basket and the increase in demand.
The game is nearly over, I'm 99.99% sure that a deal will go through at a very lucrative price for shareholders, because remember, the BOD have the exact same interest as you, maximising shareholder value with the substantial amount of shares they hold.
Lots of green boxes on here today, news must be close.
Hi Billions
Agree - cant complain if we get double the AFC.
For the overseas investors, however, it will be a question of how desperately they want this asset / company. And, this is where I was coming from on the discount rate being used- If the overseas buyer really wants this then you cannot have this differential in the discount rate but I may be wrong.
Indeed there there are unique factors in play and blockbuster information not available in public domain is also possible. But I take these away the unexpected bonus rather thank already banking on it.
Next few weeks will be interesting. GLS.
I know everyone wants this deal pushed over the line. But am I the only one who since the beginning of the year has been wanting it to drag a little longer. . . .
just so that I start my 2021 ISA allowance with cheap EUA shares in it?!
If others are intending to do the same perhaps then we may see SP rising then?
Knobhead come back with some substance!
I want the best possible outcome for the sale.
But all this b@llocks of £10, £35 a share go away and dream somewhere else.