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Agree but we need another bidder, until that happens Jabba has a cheap option to buy LMI and unlikely to raise offer!
The LMI mkt cap of circa £200m is a joke considering they raised £263m from the last rights issue alone. The LMI Board need to consider their position very closely recommending this offer. A decent management will be able to negotiate financing with the improving Pt price increase. If Froneman thought LMI were worth £1 15 months ago he must think and know they are worth a lot more today. If another party came in with an offer circa £1.5 per share I very much doubt Froneman would walk away... This could get quite interesting in the coming months.
LMI have struggled in last few years mainly due to low PT price and high and rising COP. If the PT price rises sustainably to say 1100 plus and this is possible in my view as firmly believe fuel cell usage will significantly boost demand in coming years and if this is start good. Whilst not trying to defend management you have to be fair, they have been working in a very hostile environment in last few years with low PT price. To survive LMI needs significant investment to reduce COP in order to survive long term, so any bidder would need to take that into account, that and LMI "hidden debt" maybe somewhat off putting. SBGL has a significant advantage over other bidders due to co location of LMI/SBGL operations this allows it synergies and low investment costs to reduce COP. Although worryingly Jabba had been saying recently that SA is becoming uninvestable in! This does not bode well for takeover but suspect he is trying to influence Govt to make changes to costs e.g. tax, royalties etc. Still think SBGL takeover best at present and think markets will be positive on deal completing so SBGL may rise enough to give LMI shareholders £1.20 or more when deal completes. Or as I have mused before maybe Ben should adk Jabba if he is seriously contemplating leaving SA that LMI takes over SBGL platinum! I would vote for that.
I wouldn't rule out another bidder joining the table soon especially if Pt starts rising. The current mkt cap of circa £200m is ridiculous. Lets face it £600m would still represent a bargain as this has the potential to be worth much more than this in the future...
The problem with LMI is the Board. They need to go and quickly in my view. Hopefully if 25% of LMI shareholders vote against the deal with SGL it will be the time for them to do the honourable thing and step down and make way for a proactive new team. Virtually all their decisions have been disastrous and destructive. How they are still there is a complete fallacy. Pt could go up another $500 and the Board would still recommend the deal with SGL...
Pt having a good day. At this rate it may not take too long for it to reach 1000...
About to go? investec buy more LMI
Oh i was there! always a surprise at the bottom
You could probably double that figure Ta... Well lets hope we get to 1000 before June. I think Froneman will have to sharpen his pencil somewhat if he wants LMI on the current terms. How the Board can justify this takeover is just beyond me. They really need to go. Maybe they should try to mine something else like Bitcoin.
1000? BP is key deal to cheap for assets $1 billion replacement cost surely? 10bill was turned down ffs
At what price does pt have to be for 25% of shareholders to reject this bid?
RR has that long gone was alot more than that a while back...short PD long PT spread was a cracker
You were relentless with KAZ also if i remember correctly?
Call option by LMI board lol
A long LMI short SGL strategy is not necessarily predicated on all of that. Just saying.
There's still something like a 5%+ discount I think? This is an attractive return for a "merger arbitrage" strategy, buying LMI and shorting SGL
I do agree with regards to that if they are right about pt increasing Lonmin will probably be the best performing stock as it has been beaten up from every angle. If there is a decent rise in pt it will change LMI's fortunes dramatically. LMI could certainly do with a bit of good luck because it has had its fair share of bad luck...
All views are welcome Rastuss as it makes this bb fair and balanced. We may not agree on all issues but at least there is respect for one another's views which is hard to find on other bb's.
If they were bullish of the platinum price they would buy pt or other pt miners but they are buying LMI. The holdings they have are more than just a punt.
Are still buying LMI. Surely if they thought that LMI would go into receivership they would not be buying. As you correctly point out Rastuss the discount is narrowing so why wouldn't they be buying SGL instead?
Rather strange don't you think...
Rastuss - A lot has changed since the issue of the takeover document. Its about 17 months old...
Note; Sale of interest in Petrozim, No banking covenants, higher bp price, weaker ZAR and lets not forget that LMI made a profit last year...
With regards to Jabba picking LMI for a song that's what he is trying todo with the current offer. May I point out for those who don't know the offer from SGL is not a cash offer. I can't see potential receivers accepting SGL shares...
Looks like all this talk about business rescue is propaganda in order to try to persuade LMI holders to vote for the SGL takeover. I think it's looking as though more holders are feeling confident of the potential future of LMI. It wouldn't surprise me that a predator is waiting in the wings to acquire SGL if they are successful in obtaining LMI. Bristow is on the hunt and I wouldn't rule him out...
If AMCU strikes at LMI the risk of going into business rescue will be high. This could allow Jabba to pick up LMI for a song and potentially sort Uncle Joe at same time. SBGL may not be as cash strapped at that time you never know next set of SBGL will determine cash position ! Business rescue may bring in other bidders as well as they could start with clean sheet. This scenario is not good for existing shareholders though. It also depends on buying out streaming deal as they have rights over assets under deal. SBGL deal still best for LMI in my view but there is still some way to go!
Ruffer and investec think otherwise Rastuss
I doubt Uncle Joe's intelligence but I don't think that he is stupid enough to strike at Lonmin...