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Response to Press Speculation
Polo Resources Limited (AIM: POL), the multi-sector investment company with interests in oil, gold, coal, copper, phosphate, lithium, iron and vanadium, notes that a recent press article publishing the views of a purported minority shareholder of Polo Resources, has served to create unnecessary and inaccurate speculation surrounding the Company.
Polo, has, without success so far, attempted to contact the originator of the article in order to formally answer this purported shareholder's concerns. Further efforts will be made to contact the author in order to clear up a number of inaccuracies that appear in the article.
Polo takes this opportunity to make clear that it remains a long term supportive and activist investor in all companies held within the investment portfolio and has no plans to dispose of any significant investment stake at this time. The Company continues to focus on our stated investment strategy, which is to continue to support our current investee companies and work to realise and return value to shareholders through timely and appropriate transactions and specifically the appreciation in the value of the Company's shares rather than by means of distribution as previously approved by shareholders.
The best way to accomplish the objective of enhancing shareholder value would be be a Dutch Tender Offer. In such an offer, the company announces that they will buy back xxxx value of shares at prices ranging from yy to zz.
For example 5 million GBP at prices ranging from 5p to 15 p/share. Shareholders are invited to indicate how many shares they would be willing to sell at what price. So shareholder A might say I will sell 1 million of my shares at 6 p, another million at 7 p and 2 more million at 8p. Shareholder b might say I sell 500,000 at 5 p and 500,000 at 6 p. And Shareholder C might say I will sell all 5 million of my shares at 10p. The company then determines what is the lowest price they have to pay to get 5 million GBP worth of stock and that becomes the buyback price. So if that price is 7.5 p, everyone who offered to sell at 7.5 or below gets that price and everyone who was willing to sell at higher prices gets to keep their stock. This is the most democratic and efficient way to do a buyback because the company does not overpay and shareholder get to sell or keep their shares depending on their view of the real value of the stock and its future prospects.
BTW, I like the name Phronimos. It is a Greek word that is hard to translate but probably comes closest to the meaning of Prudent. And the Polo management has been anything but prudent in the handling of the company assets. It has long seemed to me that either :
(A) the NAV quoted by the mgmt. is a fiction of wishful thinking or their imagination or
(B) they are totally incompetent or self-serving if they don't stop wasting shareholder capital in other investments when they can sell assets and buy in their own stock at a 75% discount.
Yes sorry misread the post , seems a bit curious them pushing Tang in this way ? Polo have never been brill at letting us know who the investments are doing and income .
Phronimos Capital is not a Polo shareholder.
Looking at Polo website I take it that they are well behind on updating the site ? Looking at major shareholders there is no mention of Phronimos at all ? Curious , have I missed an rns ? Good to see some upward movement in the sp though . Answers on a post card please , lol.
https://www.investegate.co.uk/phronimos-capital/rns/phronimos-urges-polo-resources-to-return-capital/201902130700048310P/
Today's RNS (RNS Number : 8310P) about this should really have been lodged under POL.L to be visible for the relevant audience.
As I understand this such a tender works almost like the opposite of a book-building process used for share issue placings on proper exchanges (not AIM of course where placing shares go to the lowest bidding bestest matey cronies who the flip them next day)..
In the event Tang ignores or declines, then subject to sufficient shareholder support a vote on shareholder proposals could be forced.
If the tender offer were to come about, all shareholders should be entitled to sell their shares at the tender price.
My guess is it might work like an IPO and if over-subscribed we would get an allocation, but I'm not sure. Anyone else got any ideas?
In the event Tang ignores or declines, then subject to sufficient shareholder support a vote on shareholder proposals could be forced.
If the tender offer were to come about, all shareholders should be entitled to sell their shares at the tender price.
My guess is it might work like an IPO and if over-subscribed we would get an allocation, but I'm not sure. Anyone else got any ideas?
Thanks shareaction, I was also wondering how that tender offer would work.
Phronimos are trying to get a revised count of the number of shares held by concerned shareholders that support their proposals. Their contact details are on the letter.
This is definitely very interesting. However I believe Phronimos is unrealistic with their suggested 12p buyback of 20% of the stock. Why? The majority of Polo shareholders today would be ecstatic to sell their shares at 12p so which shareholders will be the lucky chosen seller at 12p? None of course; a buyback tender auction open to all would quickly end up with a price substantially lower as enough shareholders probably would be willing to sell at half of 12p. Don't forget, Polo's only true Net Asset Value today is in the 138,9 mill shares in Hibiscus Petroleum, the rest is ... frankly, worthless shite.
I've sent Phronimos an email. Let's see what they say.
Tripod, I think you might be getting a call from these people to see if they can count on your support to maybe force Tang's hand. I do take it the letter is legit of course?
They are correct though as TANG IS TAKING THE PISS!!
Very interesting letter. I wonder what the "other means to effect the changes necessary to protect their investments" are. Even as a long term and reasonably large shareholder (3 million shares - more fool me), I feel powerless. I'm really pleased to see other shareholders taking action to hold the BOD to account. Tang might be working out if he can simply ignore this. I'm concerned he will bleed us dry if he carries on like this.
timing to me suggests they want a slice of GCM after deal just announced with POWERCHINA
What's keeping Tang from issuing an immediate RNS after receiving this letter containing such a price sensitive matter?
Full article thanks to a poster on the ADV FN board http://www.phronimoscap.com/news
I would like to buy in but can't find Pol listed in Barc stock broker. Smart investor is useless..
I reckon the early “sales “ were in fact buys around the 4.50 mark
Encouraging but relatively small trades
Posted on the GCM board think they are keeping its powder dry for a big slice of our pie. https://docs.google.com/a/phronimoscap.com/viewer?a=v&pid=sites&srcid=cGhyb25pbW9zY2FwLmNvbXx0M3N0aW4xfGd4OmQ0Yjk3MTNkMjA3MzU4ZQ Phronimos Capital Urges Polo Resources Limited to Return Capital to Shareholders February 13, 2019--On January 28th, 2019, Phronimos Capital, LLC, ("Phronimos") acting on behalf of beneficial shareholders of Polo Resources Limited ("Polo" or the "Company") (LON: POL), transmitted a letter to the Board of Directors (the "Board") of the Company outlining several proposals that we believe will be beneficial to all shareholders. Clients of Phronimos and other concerned shareholders of Polo supportive of the proposals outlined in the letter (including a return of capital to shareholders via a tender offer at 10p-12p per share), currently hold approximately 14.0% of the total shares outstanding
Why can't I find polo on Barc stockerbrokers ??
So how exactly did your re-balancing by offloading half a mill shares in two equal instalments on the 5th and 7th help the share price ? My policy to sell a bit at a time , where you coming from ? Are you buying or selling or investing ? Make your mind up . Maybe the fundamentals have,nt changed but somebody seems to differ with your view . Just asking .
Typical... re-balancing part of my long term portfolio by offloading 1/2 million Polo shares in 2 equal installments on the 5th and 7th this of all weeks... Well, glad my policy is only to sell a bit at the time. However the volume today did not indicate any fundamental changes to Polo. We'll see... Good luck all buyer, holder and sellers!
Unexpected buying , good to see . I notice a flurry of very small trades ? Don't have any answer for these but seem to remember this happening in the past . Could be wrong but I think they are some kind of signal , move afoot ? Any ideas guys and girls ?
hi papa. Good point. The first 1,800,000 was clearly a buy. The second 1,800,000 buy was very close to the mid price. If it was a sell, that explains your query. Todays shenanigans is a mystery, however.