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Hi Pompey - I hope you are well. I'm with HL too, and I know other divi earners of mine are subject to tax so I can't imagine it'll be any different here. (More than happy to be proved otherwise)
Absent of further news is a fair statement i would say SA.
The new MT production target suggests something else has went on in the background, to me it's a fairly big giveaway in that respect tbh.
But with nothing concrete, you can only speculate on what you can and are allowed to see, that new production target being a several fold increase to the last one and dropped into the RNS before the sale RNS.
We'll just have to wait and see exactly how it plays out, but with fairly direct statements in RNS, placing yourself in their shoes and asking yourself 'what would i do?', then in my eyes it's fairly straight forward -
Christian Schaffalitzky, Executive Chairman of Eurasia, commented: "The Board remains focused on maximising shareholder value, and, after receiving approaches from multiple parties interested in acquiring the Company's assets, has decided that launching a formal sale process under the Takeover Code is in the best interests of shareholders, which could result in a sale of assets or the Company. The Company will work with UBS and its other advisers to execute the process."
Great post by the way.
GLA
Thank you ShareAnorack..interesting..you mention dividend will get cgt
My shares are in a HL Isa... share sales monies go into the isa..does that also apply to dividend
payment? Regards pompey
Thanks for the reply! I understand that grunt work would be done by more junior bankers, as my ex was one of them! I do understand from said ex about deal structures, so I was wondering if Ian Hart or Jason Hutchings wanting their names on the RNS (and the deal) would be indicative of any possible signs of its relative size (in terms of $) and importance.
Alfe, I doubt they are spending much time on the deal. Ian Hart maybe, given his mining focus. It is commonplace to put marquee names on the RNS, but the grunt work will be done by more junior bankers.
Thank you for a very informative post - much appreciated
Thanks for the info, ShareAnorak.
Would it be possible to elucidate a bit more info? I understand the UBS names on the FSP RNS - Jason Hutchings, and Ian Hart, are UBS's Head of M&A in Natural Resources in EMEA and Co-Chairman for IB in the UK. Are these names indicative of who's the deal head on the case or are they just generic?
...where we are (ran out of characters).
I'd be glad to be proved wrong about 35p.
There seems to be a lot of confusion on this board about how the FSP mechanics actually work and when an RNS might come. I used to work in M&A, including public takeovers, so have some idea of the likely scenario.
UBS are running a sale process. My guess is that to participate in the process bidders will have had to sign an NDA and commit not to buy in the open market. This is to maintain a level playing field between bidders. So speculation about bidders buying up shares in the market is wrong-headed. This can't happen. A bidder that is not participating in the FSP could buy shares, but it won't be privy to any due diligence, so again it is unlikely.
UBS will probably be running a BAFO process (Best And Final Offer) to a fairly tight timetable, with a fixed deadline. There is no obligation to announce individual bids as they come in, simply the winning bid, assuming it is recommended by the EUA board (in which case the directors will have to commit their own shares to support the bid). An EGM will only be required if the offer is for assets (say MT) rather than for the whole company. If the takeover is for the whole company then shareholders will receive an offer document setting out the terms of the offer and how they can indicate their acceptance (or not). Again this process runs to a set timetable under the Takeover Code. If the offer comes from another listed company, then it could include shares as part or full consideration, or as an alternative to a cash offer, although then the offer price could fluctuate as the offeror's share price fluctuates. The advantage of taking shares is that you can defer some or all of any capital gains liability that may be due.
With the shares now trading, and possibly settling around the 20p mark before any further announcements re flanks etc, bidders will be mindful of the standard takeover premium (ie the premium for acquiring control), which is around 30-40%. Premia in excess of this are very rare. So absent any further news, bidders will be looking at a takeout at between 26p to 28p. My guess is that board will be looking to make various positive announcements during the sale process that will drive the share price northwards, thus resetting the baseline against which a market premium is calculated. Talk of an exit at between 70p and £1 is, in my view, fanciful. This is the full value of the company to a bidder, with total control (which we as individual shareholders do not have), and some value needs to be left on the table to make the deal work for a bidder. Which is why I stand by my earlier 35p exit valuation.
If the offer is for MT only, then an EGM will be required and presumably the bulk of the sale proceeds will be returned to shareholders via a special dividend. The advantage is that we keep our shares in EUA and can continue to participate in any further upside; the disadvantage is that the tax treatment of dividends is worse than it is for capital gains.
That's my take on wher