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I'll answer your erroneous and misleading comments below. Also, I note you joined this bulletin board on the day of the takeover notice, 2nd November 2023. Bearing in mind the consortium will no doubt be trying to hoover up stock from any 'loose hands' I find it suspicious that your posts all incorrectly point to a 'lose-lose' situation for us retail shareholders. The board/Tennyson have clearly responded to September's IOI takeover letter with an in depth analysis of the true value of the company, currently NPV 21p, rising to 112p and 256p using current and last years high coal price respectively.
1. The consortium has to inform the ASX at stage one and it is in their interest to request exclusivity. However that by no means implies they will be allowed it! Bearing the rock-bottom market price and potential value of the assets, rival bids cannot be ruled out.
2. You talk of steps to a transaction, then jump to the end result of the process... the consortium requires at least 90% shareholder approval to mop up the balance and delist. Hostile off-market takeovers are unlikely to succeed without board approval. Read the info.
Everyone basically get "Fielded" for good if they are not an institutional investor. The total number of shares 400mill. This is a goodbye letter before output.
Well - by virtue of the published statements relating to this they have already engaged the ASX directly to prevent competing bids. This statement alone implies that they are much FURTHER down the track of an off-market takeover process. The steps to a transaction of this format is outlined clearly online... this one comes across as textbook. The first thing to happen post the takeover is likely to be a full delisting from ASX...followed by a period of being full subscribed on LSE/JSE. The individual shareholders will likely be excluded post the return of their shares.
Firstly, I would wait for an actual offer! The board have made it clear the consortium sent a letter noting their interest at potentially making an offer between A$0.20-0.23 back in September. Then recently followed up with another letter but have not yet submitted a complete off-market approach. Read the RNS.
I am not sure what you mean by 'if the offer goes through'. If you read the info I posted on ASX takeover's it explains the predator firm needs at least 90% approval to mop up the remainder. Also, it highlights that It is rare for a hostile, off-market takeover to succeed, without eventually winning the approval of the board... Therefore I expect their offer to be increased substantially. Read the takeover info link.
Moreover, according to Tennyson research analysis, The sum of the parts net-present value is currently 21p using low, long-term coal prices; discounted asset prices and cash flows. Therefore, I doubt the independent committee (which has been set up to review this incomplete offer, in the best interests of all shareholders) will recommend it... Also, bear in mind Tennyson highlighted their NPV valuation model price increased to 112p when using CURRENT coal prices; rising to 256p using last years high price... Read the Tennyson report on MCM website.
To conclude, I expect a much higher offer, or hopefully, multiple bidders join the party and there is a bidding war.
Source:
RNS Link: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.mcmining.co.za/all-categories?task=download.send&id=1791:receipt-of-notice-of-intention-to-make-a-takeover-take-no-action&catid=105
Takeover Link: https://www.minterellison.com/articles/how-an-off-market-takeover-bid-works
Tennyson Report Link: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.mcmining.co.za/all-categories?task=download.send&id=1773:tennyson-equity-research-reportl-mc-mining&catid=107
If you require any more questions answered and reasoning provided I suggest you politely ask your broker.
DYOR & GLA
So Goblimey, what would you do if the offer goes through and you owned shares? Would you sell or hold - and reasons for both options.
No, this is not definite. Take a look at this weblink which explains an ASX off market takeover offer... How a takeover bid works - off-market. This article explains how an off-market takeover bid can be used to acquire control of a listed Australian company.
https://www.minterellison.com/articles/how-an-off-market-takeover-bid-works
What is an off-market takeover bid
Takeover bids are the most common way in which control of Australian listed companies and managed investment schemes is acquired.
There are two types of takeover bids: off-market and on-market, with off-market takeover bids being far more common than on-market takeover bids.
An off-market takeover bid is a procedure under Chapter 6 of the Corporations Act under which a bidder makes individual offers directly to all target securityholders to acquire their securities.
Target securityholders are free to decide whether or not to accept the bidder's offer – if they accept then the bidder acquires their target securities.
If the target board recommends that target securityholders accept the bidder's offer from the outset, the off-market takeover bid is considered 'friendly'. As an off-market takeover bid is driven by the bidder and does not require target consent or co-operation, it can also be used for a 'hostile' acquisition of a target.
Interestingly, hostile off-market takeover bids are more common than friendly off-market takeover bids, and in most cases an off-market takeover bid that starts as a hostile bid is only successful if it is ultimately recommended by the target board.
Overview of an off-market takeover bid
An off-market takeover bid consists of sending offers contained in a bidder's statement to target securityholders, a response by the target in its own target's statement, and target securityholders lodging acceptance forms and receiving cash or scrip (or a combination thereof) as consideration from the bidder in exchange for their target securities.
Key steps in an off-market takeover bid:
Initial approach
The first key step in a friendly off-market takeover bid will typically involve the bidder approaching the target with an indicative offer to acquire 100% of target pursuant to an off-market takeover bid.
Due Diligence
If the target is amendable to the bidder's offer, the target will typically grant the bidder an exclusive or non-exclusive period of due diligence so that the bidder can confirm its interest in the target and the offer price.
If the offer price includes bidder scrip, the target may undertake some due diligence on the bidder so that it may confirm the value of the bidder scrip.
In a hostile off-market takeover bid, the bidder will not have access to target's confidential information, but will base its offer price and terms on the bidder's understanding of target gained form publically available information such as target's continuous disclosure announcements and periodic finan
Given the current set of circumstances...does the takeover result in a compulsory DELISTING?
Clearly, they cannot go back to the markets at a later date and they would have burnt a few bridges along the way. A rights / subscription offer to the market at a later date also sounds improbable. The thing is that Senosi has not even delivered on the initial promise they entered with - bulk shares in exchange for workforce and consult etc.
Any views on the Delisting as the ultimate next step post take-over?
My understanding is the main listing is on ASX, therefore those market rules apply... The consortium needs 90% shareholder approval, thats not easy, especially when you consider how fragmented the shareholder base is beyond the 64.5% in the consortium. They need 25.5% more... Why would any of the remaining 35.5% like this offer, bearing in mind the recent in-depth analysis and value highlighted by Tennyson?? Unless I am missing something?
GLA & DYOR
Source: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.mcmining.co.za/all-categories?task=download.send&id=1773:tennyson-equity-research-reportl-mc-mining&catid=107
If the 'sum of the parts' is valued at 21p using discounted cash flows; discounted asset values; and low long term coal prices, then I do not expect the board to recommend the offer. Moreover, using the current coal price the value increases to 112p, then to 256p using last years high price! See the Tennyson research report link to the company website above.
I expect the offer to be rejected with a view for much higher. Now that the firm is in the spotlight, perhaps other interested buyers may emerge... Perhaps a commodities trading giant, or Thungela, or Arcelor Mittal... The list goes on...
I feel the takeover offer is derisory and is opportunistic, exploiting the bottom of the market valuation. Now that peak rates are in sight I expect institutional investors, banks & corporate financiers and acquisitive companies to become much more active.
GLA & DYOR...
Or your theory tootight which to be fair isn’t a bad one :)
I’m not usually pessimistic but the whole thing isn’t really a very good look. Fingers crossed for everyone
For want of a better phrase he’s “swinging his di**” with such a lowball offer and I feel for those who have been here longer than me, particularly those as well researched as you Bozmo. I’d even say that your comment that the offer should be five times higher is under selling it, given market conditions and the stage of development of our assets we’d be perfectly inclined to ask for 7 or 8 times more. The big BUT though is that 64.5% of the issued share capital are behind this. Anyone hoping for more than 12p (best case) is living in dreamland (in my humble opinion), power and influence and who you know have dictated circumstances
IMO which means nothing, the maximum of 12p is to scare traders away, keep the share price as low as possible, would imagine it will be agreed on a price between the 12p and 21p in the Tennyson report.
Pure guess, but he knows what its worth a lot more than both and he will have funding sorted out already to go.
The offer is in AUD so looks like a maximum of 12p.
Would like to see us above 10p asap
When I saw them in London I asked if Senosi was the kingmaker?! Looks like he’s pumped it up for the rights issue, took the money and got everyone to buy in, now trying to low ball it at 2022 levels. Buying an asset that’s worth 5 times more than he’s trying to pay for it. Disingenuous is being kind.
I expected us to be taken out before Makhado got to production but I expected a fair price.
I think worth a punt at 8.5p so grabbed a grand,s worth. Would be happy with 18/20p but feel for lone term investors.
Did mention what was in it for Senosi Group Investment Holdings Proprietary Limited in the long run when they first got involved, if the report says 21p that's a starting point.
Although it will be lower it's who you know what counts
Https://www.miningreview.com/coal/mc-mining-turnaround-plan-at-the-uitkomst-colliery-pays-off/
Unfortunately this business has not turned a profit for donkey years, while the share price has tumbled year after year, the odd spike and the 1 share for 20 have put the share price up again only for it now to be in the single digits zone again, with coal trading close to the 120$p/t it's even more frustrating.
Funding is needed a good spike and I will consider whether to hold or not. But gla
Looking at the Tennyson report:
Page 20. My understanding is, if AP14 is above $120 pt then the firm receives R200 pt produced at Vele. AP14 has been above this level consistently and is currently above this level. Therefore, assuming Vele is at full production 60,000t per month, thats R12m per month, R144m per year, ~$7.5m net-income per year going forward, just from Vele.
This is addition to Uitkmost taking advantage of international coal prices... Read the report, the analyts values Uitkmost @ NPV $25.8m.
The business is profitable...
totally agree once again a huge let down. year after year the same old bull****, and still no funding.
Relative new board just as useful as kicking the can down the road as the last lot and the one's before, coal being mined from a coal mine which we won't receive money for, but hey we aren't paying care and maintenance.
Funding looks as far away as ever, our flagship mine won't be producing any income untill at least 2026 and that's very hopeful.
Tennyson report should have put a decimal point between their 2and 1 projected share price.
Hopefully I am being over critical but it's been the same old same old for years now.