Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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A RTO (reverse takeover) into a shell gives more certainty than an IPO (initial public offering), especially in a weak IPO market, and allows a company to raise its profile and share price before raising funds later at the most opportune moment.
Many of the largest companies have their roots in RTOs, including even FTSE 100 constituent WPP, the world's largest advertising company:
"WPP plc
... WPP plc is a multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. It is considered the world's largest advertising company, as of 2019. ...
The company was founded as Wire and Plastic Products plc to manufacture wire shopping baskets in 1971. In 1985 Martin Sorrell, searching for a listed company through which to build a worldwide marketing services company, bought a controlling stake...."
https://en.wikipedia.org/wiki/WPP_plc
So the "extremely exciting opportunities" to RTO being negotiated by MILA could result in something pretty special happening here ... which should mean a pretty special reaction from the share price.
YOLO is now ASLR, and has continued its stellar rise.
Up another 16.92% (5.5p) today to 38p: market cap. £35.6m.
YOLO-ASLR has now 16.5-bagged from its s.p. at the end of September last year (2.35p).
Remember that it was a change of investment strategy to focus on technology that triggered the start of YOLO-ASLR's rise:
2nd Oct 2019 7:00 am RNS Placing and Investment Strategy
" ... Investment Strategy
The board of directors has conducted a review of the Company's investment strategy. One outcome of that review is that the board has decided that, in the light of the current market conditions and pipeline opportunities, within the scope of its current investment strategy it should give particular focus to technology opportunities in the fields of big data, machine learning, telematics and the internet of things (IoT). ..."
https://www.lse.co.uk/rns/YOLO/placing-and-investment-strategy-isux13td1iyxled.html
I wouldn't be at all surprised if shareholders attending MILA's recent AGM received an indication that MILA's new strategy includes the technology sector, which I believe it almost certainly does.
Which, combined with the "extremely exciting opportunities" to RTO that are being negotiated here, makes this a very compelling investment opportunity.
There were four MILA trades on 23rd. December after the AGM, which were buys apart from a small trade of £71.28.
This suggests that the shareholders attending the AGM were pleased with what they heard:
23-Dec-19 15:57:09 2.44 11,379 Buy* 2.10 2.60 277.65 O
23-Dec-19 15:56:56 2.44 74,304 Buy* 2.10 2.60 1,813 O
23-Dec-19 13:34:19 2.11 3,378 Sell* 2.10 2.60 71.28 O
23-Dec-19 12:39:45 2.4499 40,330 Buy* 2.10 2.60 988.04 O
P.S. Thanks John.
Anyone attend the AGM?
Excellent post! As soon as a target is mentioned, this will see multiples in my opinion
A non-resource and domestic RTO should be relatively quicker, cheaper, and simpler to arrange.
Whereas foreign acquisitions obviously increase costs, and resource acquisitions tend to have more complicated due diligence, and risk of abortion.
In addition, two other potential barriers to an RTO don't apply in MILA's case:-
• It's a 'new', 'clean' shell, as opposed to a 'dirty' shell that previously housed another business, which can have left some toxic baggage.
• It's very lowly-valued, including re. cash, so there is no problem of shell overvaluation putting off interested parties.
And unlike most penny share fundraisings, a small cash-rich shell can raise money at a premium.
For example, a few years ago the shell ACO raised funds at a premium of 71.43%:
"3 August 2016
Acorn Minerals Plc (the "Company")
Subscription
The Company is pleased to announce that it has entered into conditional agreements with a group of unconnected investors introduced by Peterhouse Corporate Finance, pursuant to which such investors will subscribe in cash for 16,517,778 new ordinary shares in the capital of the Company (Subscription Shares) at 15p per share (Subscription Price) to raise gross proceeds of GBP2,477,666.70 (Subscriptions).
On issue, the Subscription Shares will represent 53.62% of the issued share capital as enlarged by the Subscription Shares.
The Subscription Price stands at a 71.43% premium to the closing middle market price of an ordinary share in the capital of the Company on 2 August 2016, being the latest practical date before the date of this announcement. ..."
That’s my opinion too.
No, I've yet to see a share that suspends on an rights/open offer
Madhatter:
If there is a rights issue/open offer are they likely to suspend the shares immediately on announcement? Last time they announced an RTO they were suspended more than 6 months
Thx for reply.Surprised no mention of passing of resolutions at AGM
From experience of other shares it's normally around 3 weeks to a month I believe.
How long I meant to take up rights
How has one normally got to take up the rights? Surprised no mention of AGM resolutions passed
If there is going to be a rights issue in Jan, as I suspect, people really should be buying in now to maximise their potential offering on the issue. Plus to get in before the cut off date.
I read it as a cap of 50 million shares. They say nominal value of 500k and nominal value of the shares is 1p. So they either raise up to 500k at 1p or perhaps up to a million at 2p and so on.
I'd say the price should go up, but not because of azn indication of the company. This company would then have the best part of £900k to rto. They don't need that much, which (Imo) would imply a much bigger rto is the target.
Bear in mind for a normal company you'd think yeah they'll just flip it for fees. But here the free float is so small very few people will flip
Also, if they do give any indication of the deal then this would be massively over subscribed
Well if they give some idea of the target, perversely the price might go up after a possible rights issue. I doubt a director would buy £10K worth if excellent news was not imminent!
Sorry, to avoid confusion, they haven't announced it. But seeing as I'd say it's virtually guaranteed all resolutions will pass there will be a rights issue very soon I'd imagine, as they will need it (potentially) for an rto. Just waiting them to rns the agm results. Probably Friday.
Didn’t know an open offer was announced? What are the terms
Still no Rns yet. Should have one today.
It's extremely encouraging to see them only want to raise this way.
If you read the agm list of resolutions, it includes authorisation to raise *only* by way of a rights issue /open offer £500k
What do you mean?
So, are we all planning on taking up our open offer?
More buys than sells gotta start making it difficult to buy again