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"Ergo, I think that buying more at just under the current offer looks a very safe bet and if the 'carpetbaggers' buy more in the mkt / offer more to get over the line, then that will be a 'mini - bonus', too. "
Sasa43,
I agree that it looks a safe bet that you will turn a profit with this strategy, but it might take a while and not be very substantial.
The take over is scheduled to complete sometime in Q4, so between 2 and 5 months. If the consortium pay over 300p for any shares between now and then, they must up their offer to match. I may be wrong, but I expect the sp to be constrained within a few pence either side of the 300p offer price. Hence, you stand to make a small percentage profit, at a time when the gold price is rising.
Guys, don't take a knee jerk viewpoint and read everything.
Here's my take, the consortium led by the good old Chelsea boss has agreed to sell (presumably to a Russian mate who some might surmise will reciprocate the favour).
Their 40% ish shareholding is significant but cannot carry the day unless other shareholders oblige - for a takeover like this the authorities typically require a 75% vote in favour.
Take a look at the AGM outcome, just RNSed, resolutions 7 and 8 failed to pass, spookily by a vote of 40% + against - as those resolution (if I'm reading it correctly ) where for new articles of association and allowing the BoD to issue 33% new shares I believe they would have facilitated this deal.
Key is vote are clearly split with not all big shareholder on board with the deal - I sense a fight brewing and things are far from done - the Russian authority approval is a formality but the UK listing is not.
£3 is the minimum and more is possible, our buyer cannot purchase the sub £3 shares in open market without paying the seller the differential - IMO knee jerk selling below £3 is for jerks now the SP is underwritten until things are clarified.
Each to his own though
Ridiculous deal for the directors to agree to.
This deal comes roughly a month after Fortiana soldtheir stake of about 5% in London listed Petropavlovsk Plc, another Russian gold miner locked in a boardroom battle. At the time Fortiana said selling that interest gave the company cash to pursue other investment opportunities.
The question is why have our board of directors accepted this deal? What do they stand to gain letting HGM go less than 6 months into the current gold bull market...
Hi kenj - well, if the majority of the remaining holders let this Fortiana 'coup' go through and get this 'going for a song', then those who failed to stop it will still get the 300p cash offer ultimately, as set out.
If their attempt to gain control of the company fails, then I'd expect the sp to be relatively unaffected, since no offer premium will be lost as it doesn't exist right now and it might, in fact, regain its earlier momentum from here. It certainly deserves to rejoin the gold boom...
Ergo, I think that buying more at just under the current offer looks a very safe bet and if the 'carpetbaggers' buy more in the mkt / offer more to get over the line, then that will be a 'mini - bonus', too.
I've just upped my holding by 40% on such considerations... sasa.
"I thought this share was proofed against the usual Russian shenanigans by those Oligarchs who were numbered amongst its major shareholders, but no, a way will always be found to shaft the little guy."
I think that you have hit the nail on the head there, Workingstiff.
Still at least we have both made good money out of our Russian miners. Nothing surprises me with POG, but I expected better from HGM.
Dartron,
I have looked up what happens when a group acquires 50% of a company's shares. The rule to make a mandatory offer still stands, but the need for a vote at an EGM is no longer necessary.
"Shares carrying more than 50% of the voting rights
The Panel will normally waive the requirement for a general meeting under this Rule where the holders of shares carrying more than 50% of the voting rights state in writing that they approve the action proposed and would vote in favour of any resolution to that effect proposed at a general meeting."
Fortinana have announced that they intend to add to their holdings to achieve 50%.
This is likely to tie the sp to around 300p until they have reached their target, and then it is game over for all us small investors. I suspect that many will not wait, and will sell up early, making it even easier for Fortinana. Sadly, I am thinking about it myself.
I thought this share was proofed against the usual Russian shenanigans by those Oligarchs who were numbered amongst its major shareholders, but no, a way will always be found to shaft the little guy.
I've made plenty out of this over the years so I can't really complain. But of the shares I own, HGM was the one I least wanted to sell.
Time to deport Abramovich and the rest of them.
Thanks Kenj, Didnt realise they must make a mandatory offer. But it will be just that, an offer, and as you say will need a high proportion of approval. If it is £3.00 that's not too bad, I have done well multiple times out of HGM, but it could also be higher, though you would think the sellers of the 40% must have arrived at what they felt was a fair value. Plenty of time to invest in other gold miners, and being forced to realise a profit isnt all that bad.
We've had these oligarchs on the register for yonks - this 'agreed' deal merely transfers a sizeable minority interest from one group to a single entity; under the rules a 40% swap has to be offered to all the shareholders for consideration by them - the owners of the Co.
There's no premium here which a full offer normally comprises as an incentive for all to accept - what amazes me, is why the BoD has gone along with it? The 'independent' Directors, with Citi's acquiescence, having 'sheepishly' recommended it, so it should rightly fail to get over the 50% mark and, in that event, the sp should be relatively unaffected, given the nil premium which otherwise would be lost.
Pre - Kekura and the anticipated good eps achievement / likely divd hike to be reported soon in the present buoyant climate for gold producers, if Fortiana wants it all, they'll have to pay a realistic price for HGM, like 50% more for it than this derisory attempt to scare the other holders into relinquishing their much more valuable equity than what this exchange deal is based upon at current levels.
HGM can easily stand on its own metrics today, as its recent history so amply demonstrates, so don't be phased by this change of minority ownership on the register; it's intimidatory - that's all it is, imv...
Just my take, fwiw but DYOR, as always, of course - sasa.
I have made a very good profit on this company but was hoping for so much more! The dividends were great and we were looking at £3.50 at least by the end of the year if the gold rally held. So undervalued and the true value of this company will never be known. Theft from the small share holders!
"Just a deal between a couple of Russians. Nothing to see here!!! ha ha"
Darton, I suggest that you read the RNS again, especially the title!
RECOMMENDED PRE-CONDITIONAL MANDATORY CASH OFFER
Fortinana have agreed to buy all the directors shares and will then hold over 40% of the company's shares, which means that they must then make an offer for all of the outstanding 60% of shares. THAT MEANS YOUR SHARES MAY BY COMPULSORILY PURCHASED AT 300P.
An EGM will need to be called and Fortinana will need to win probably 60% or 65% of the vote to force it through. So not a done deal, but with the BoD supporting them, it will require high turnout of disgruntled small investors to defeat them.
Today, Fortiana agreed to acquire 145,759,871 Highland Gold Shares, representing 40.06 per cent. of the issued share capital of Highland Gold.
- That is plain enough english for me.
Fortiana is a Cyprus registered company majority controlled by Vladislav Sviblov and is part of his wider business interests in the metals and mining industry. Vladislav Sviblov is Chief Executive Officer and majority shareholder of Ozernaya Mining Company which is developing a prominent zinc-lead deposit in the Buryatia region of eastern Siberia in Russia. It also controls a gold producing group of companies in the Zabaikalsk region in Russia with over 30koz pa gold production and an extensive resource base which provides for a strong Life of Mine ("LOM") production outlook.
· Commenting on the Offer, Vladislav Sviblov, UBO of Fortiana, said:
"This is a strategic investment for us, in line with our aim to build a broader asset portfolio in the natural resources sector in Russia. This transaction adds to our existing strategic investments like the Ozernaya Mining Company, which is developing zinc-lead and gold-zinc deposits, as well as several gold mining assets and prospective deposits in the Zabaikalsk region.
- Doesn't say he is buying the company, just adding to his portfolio.
Just a deal between a couple of Russians. Nothing to see here!!! ha ha
Hi Guys,
Recently got in here at £2.27 so it would be a quick profit for me but obviously I invested because I could see HGM was so undervalued with a P/E under 7 compared to 36 for CEY which I was in. The 40% of shares have been acquired at £3.00 each. Therefore under the rules the minimum offer has to be £3.00 a share for the remaining shares in issue. As far as I am aware they would have to get another 11% to make a compulsory purchase. The wording is a clue! Recommend that you accept the offer. They will have to up the offer if everyone rejects £3.00. It is a farce.!
Does this cause an issue that HGM wont rise much now, as the company has basically been valued at £3.00 per share?
The way i read it ... they are buying 145m shares, 40.06% of the shares in circulation. There are 364m shares in circulation. They are only putting an offer in for the shares from the people named in the RNS, not everyone. So you get to keep your shares
Thanks ToS and Auson. I'll continue to hold. Won't be happy if have to sell. Hgm is worth way more then £3 otherwise I wouldn't be here.
https://uk.sports.yahoo.com/news/abramovich-sells-40-highland-gold-080639602.html
I’d hold based on the phrase “expected to be not less than” in the above article. We have still to be made a formal offer. The £3 is what is being paid for 40%. I think.
KennyCunningham,
They will need to get the support of enough shareholders to get it through. On main market I think they might need 75% of the vote but this is aim and looks like a stitch up. I could see the market potentially giving a 10% speculation premium depended on further Gold price rises. Not much risk if you want to continue to hold.
The answer to this question should be written in plain English in the RNS but it's not.
Like some of the messagers below, I just want to clarify, will we all need to surrender our shares, not just the 40-something % oligarchs....??
things to come... we are going to see a lot more resources being hoovered up..
I've been in HGM since apr 2015
Wouldn't surprise me if the only way Jo Bloggs is going to get some gold is by buying some gold coins! VAT & CGT free of course I would not be surprised to see our beloved HMG put a stop to that perk!
Highland Gold Mining Ltd
HGM
305.60 GBX
+16.60 (5.74%)
Anyone moving over to PUR?
Production due to commence Q4 2020
i am happy with ,like my old teacher used to say - could do better,lol
20p and up bit like Avct tbh fully loaded and made nearly 6 figures... what about you with your little % trades..