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"My theory is that as shareholders sell, they are replaced by others who are picking up with an aim to hold for 13.5p.. Does this mean that the share price should get tigher to the t/o price as time goes on as the sellers should gradually dry up?"
Based on my prior experiences of takeovers / buyouts in this sector with Randgold, Highland Gold, Trans-Siberian Gold, Vedanta and others whose names escape me the inevitable closing of the gap is happening and will continue to keep the price on a gradual trajectory towards 13.5p. But for this hostile bid the market should have responded more positively as it has done elsewhere (MTL, ADT1, GPM, SRB, HOC, RSG) with gold futures creeping higher and this morning to just below 2,100/oz Shanta's two mines are throwing off more cash than ever.
Thank you for going to this effort Kaduval. I don't frequent the LSE boards as much as I used to but still holding 160,000 shares and intend to vote down this hostile bid at the first opportunity.
It will be surprising if major shareholders vote in favour of this deal given the encouraging gold price environment we are in and expected to remain as rates begin to drop early next year, but there is always a feeling of uncertainty whenever a shady deal such as this is pushed by the board onto it's shareholders.
Disappointing not one board member thought this will reflect badly on themselves and the company moving forward (assuming the deal collapses). Maybe that is part of the plan, encouraging disgruntled shareholders to sell. Well, my intention is to hold and buy any dips should the opportunity come along.
We need to first vote down this deal and then with the support of major shareholders who are not connected with Saturn / Patel consider replacing certain members of the Board.
Have been thinking about the possible reasoning for these shenanigans foisted onto us Shanta shareholders just before Christmas, and wonder if we are seeing a corporate version of the old bad cop versus slightly less bad cop routine, delivered as a means of achieving off loading of Shanta Gold.
Firstly the company gives us its very disappointing and disheartening Recommended Cash Acquisition RNS with the 13.5 pence/share offer, and makes it worse by adding that they think it constitutes a fair and reasonable deal for shareholders.
This offer naturally alarms long term holders here who think they are about to be cheated after years of loyalty, given the golden uplands are very nearly with us, particularly given the gold price rising and predicted to climb higher.
After a week or two of the SHG SP being on auto pilot and travelling eastwards (horizontal), I suspect we can anticipate a flying visit( hot off the plane from Mauritius) from the not quite so bad cop (let's call him Mr Saturn Bidco Patel) who will add another penny or two to the 13.5 pence offer such that LTHs feel slightly more at ease and may be tempted to accept the offer.
To be charitable to the BOD at Shanta, it could be that they are aware of geopolitical/jurisdictional issues which would favour an early buyout deal that we shareholders are simply not privy to.
I had a quick look at the interest they would have to pay. It is based on SoFR (currently 5.32%). There is then a commitment fee of 50bps already running from 19 December and escalating to 75bps six months from that date. Then a margin of 3.5% up to 3 months from when the loan is drawn escalating to 4.25% after 5 months.
So say around 10% on the $150m loan. The loan will be in Saturn (Bidco) which will have no money. So payment of this interest amounting to $15m per year will be from cash transfers from Shanta.
It seems increasingly clear that this is a flip as otherwise the one year bridging loan would not be structured with escalation clauses to encourage the loan to be repaid as quickly as possible.
Dead money while we watch POG soar.
Frustrating can't begin to describe this crazy logjam.
The loan is explicitly described as a bridging loan - but to what? I rather suspect something very similar to what you have outlined. I think Sustainable Capital, Lombard and Zurrin know this (or it has been intimated to them) and so they are knowing forced sellers.
I think the Patels have discovered an absolute gold mine under their feet and are not willing to let the opportunity pass without attempting to get their hands on it. None of the reasons given as to why it is beneficial for shareholders, the company or the employees stack up.
****goestheeasal - exactly what i was thinking, but couldn't think how to express it as well as you. they may even have a buyer lined up already. shandong? explains why the offer is so derisory.
Will some kindly announce the bidding war meaning -
how will china do this to another country and company , will this be permitted at all
I'm wondering whether this goes a little deeper and really the Patel's et al are really only in the flipping of assets business. I would at least explain why they have borrowed pretty much all the money required and for only a short period. I.e it's more akin to a bridging loan than financing an asset purchase.
It's a bit dark but let's say the Patel's are already pretty thick with the Tanzanian government so they suggest to their favoured ministers that they assemble a lowball bid. The government puts off all would be buyers by quietly whispering in their ear that life will be made intolerable if they try and by the company directly from shareholders. Instead they should wait until the company is in private hands. They get to buy the company at a commercial price. The Patel's make a quick profit on the flip and a few ministers are paid fat commissions for the whole transaction. What's not to like? Everybody gets what they want and so it's a win win!!!
All except the poor bloody UK AIM shareholders that is!!!
Yes, I think those are fair points. I do wonder how much extra capacity the Patels have in finance to pay for a higher bid. They are basically borrowing almost the whole of the bid price. Do they have another facility (doubtful) or money at the holding ETG level? I am not sure they will have too much firepower.
here are some numbers for crunching. hope this help you if you want to take it further.
shares in issue: 1,051,467,684 100.00%
total of 76 lse - no votes so far: 41,420,060 3.94% - (25%)
counteracting yes votes: 124,260,180 11.82% - (75%)
major shareholders are those with shareholdings of 3% or more.
the below table summarises the company's major shareholders as at 30 september 2023:
shares % of company
retail holders no. million held
1 hargreaves lansdown (retail) 110,520,553 10.51%
2 interactive investor (retail) 82,323,993 7.83%
3 aj bell (retail) 35,981,103 3.42%
total 228,825,649 21.76%
institutions and other holders
1 sustainable capital 87,306,112 8.30%
2 lombard odier investment 74,693,220 7.10%
3 directors (insiders) 62,152,028 5.91%
4 river and mercantile asset management 51,969,778 4.94%
5 canaccord genuity wealth management 49,945,455 4.75%
6 six sis (custodian) 49,918,419 4.75%
total 375,985,012 35.76%
the following 76 lse members with a total of 41.4 million (3.94%) shares have said they will vote "no". i list them in holdings ascending order below for them to check.
lse id: holdings
g-g-g: 5,250,000
1plus1: 5,131,391
leamielemming: 1,750,000
lowtrawler: 1,549,722
publican777: 1,500,000
cyberaichas & friends: 1,334,000
jefuss888: 1,325,000
redhill: 1,300,000
unclemal: 1,300,000
sharky1975: 1,240,000
dvharrison: 1,200,000
kadavul & mrs: 1,050,000
hounddog10: 1,000,000
jackson41: 1,000,000
noelshempsky: 1,000,000
rogerk: 1,000,000
2wheelman & family: 878,000
bebold: 700,000
****goestheeassal: 700,000
ericmca: 700,000
unvrkw: 655,000
kat-079: 600,000
mick-b: 525,000
horogate4: 514,000
e43: 470,000
kipperfoot: 469,786
s_o_h: 466,000
cutters8: 400,000
tony.addison: 346,000
jockilass: 300,000
magoo79: 300,000
uktrader & mrs: 300,000
craigb: 250,000
mimbrit: 250,000
oldmanriver: 250,000
nigelbonger: 240,000
softrock: 210,000
rossannan: 202,000
metis20: 195,000
richsoon: 190,000
danners456: 185,000
hythe1: 184,000
toptiger: 180,000
steve0711: 177,000
harchris: 170,000
longfell: 170,000
mikeha: 145,000
antanarjuato: 142,000
bankrupty: 128,888
hope2gain: 127,000
1755: 125,000
annie59: 120,000
gino73: 111,000
chappie: 110,000
bozonurky: 104,000
bubble2021: 100,000
geldautomat: 100,000
greyingsurfer: 100,000
stephengali: 100,000
zooman80: 85,000
hallsworthy: 75,000
willder: 68,000
alanxx: 60,000
cadell: 53,000
bobslob: 50,000
wanaka: 50,000
newsid: 49,473
bittentwiceshy: 45,500
spambrain: 45,000
matyboy1965: 39,100
skotkent: 34,000
adelaide23: 32,700
undercarriage: 32,000
ceed 30,000
minty77: 30,000
madogmcree: 21,500
total no votes so far: 41,420,060
gla - kadavul
Gold at 3080!!!, given that world debt is over 307 trillion dollars and rising, an unbelievable figure, your typo may be a reality sooner than we think. Just how much longer can the current system be maintained. Blessings and a happy, peace filled and prosperous new year.
Correction:
Feb 24: 2,080
Gold Futures Contracts prices, in $.
Jan 24: 2,064;
Feb 24: 3,080
Mar 24: 2,093
The nagging issue is whether there is something, some threat, in the background which is not being disclosed except in the most oblique and general terms. In particular why is Sustainable Capital bailing?
Similarly why would Zurrin not hold his ground when he is already leaving? Why did Leslie’s father bail last year on the uptick during the last takeover attempt?
Sustainable Capital says that it is a very long term investor for eg US universities. See article at bottom of link which seems to be the best public info on SC.
https://www.sustainablecapital.mu/
Gam appears to have sold a small part of its position for 17p….. perhaps it is a typo.
A lot of people here were probably taken aback on the briefing to the media that was given. It was like the Shanta Directors thought a lot of smaller and institutional Shanta investors somehow have acquired dementia or worse. I just pray Blackrock and other organisations are ringing up contacts in other gold mining companies to take Shanta Gold over. I just want all my concerns to be made redundant next week. Tony
15p is a joke as well!
It will partly depend on what POG does over the next month. I'm sure Saturn have been squirrelling away trying to get this over the line before a break out in gold but it might just be that the bid's come too late - hard not to see some sort of counter offer or increased bid if gold is sitting firmly about $2100/oz come a vote and all Shanta's peers have gone on a huge rally...
I echo your thoughts Publican.
I hold 5,131,391 shares and will also vote no, although I suspect PI’s are unlikely to vote in sufficient numbers to have an impact on the outcome. Hopefully there is an institution or two that votes to reject the initial bid.
A seriously attractive portfolio of East African assets on the table here, so hopefully we hear from Shandong again, as well as the Endeavours of this world at the start of January.
My bet would be that we see at least 15p per share offered by the end of this process to get the deal done.
It is good to see Blackrock and Ruffer buying. If everything does through as the board hopes, buying in at c 12.9 gives them c5% gains (dividend and profit) for a six month hold. Twice as good as short gilts. If another bid comes in then they will do even better. The point is that they must see little downside if the deal falls through.
Doing the same calculations, I will be holding my shares until the bitter end. If another buyer comes forward then I will have to sell but and a higher price with the satisfaction of seeing the board thwarted. Best of all, I am hoping it all falls through, this company is worth much more. At worst, if the bid succeeds, then I still gain. A no brainer hold imho.
Https://my.slaughterandmay.com/insights/client-publications/a-guide-to-takeovers-in-the-united-kingdom/
May need to download the PDF from here.
File:///C:/Users/antho/AppData/Local/Temp/MicrosoftEdgeDownloads/cd98fd2a-9584-450d-b590-5e9c70522dc4/A_Guide_to_Takeovers_in_the_United_Kingdom___October_2023_4761.pdf
Think you got the wrong person Pedro? I’ve been heavily invested in SRB from 25p with no plans to top splice for a while. Similarly I’m heavily invested in SHG too and rather disappointed by recent events however still think there's more twists and turns to come here.
All I might have said to you is try not to cross ramp too much…the SRB share price will look after itself.
HarChris....I agrre entirely with your post on SRB showing the absurdity of the market cap,and also showing by the end of 2024 that cash is likely to be more than present market cap.....!!.....I am glad you now agree with my previous posts.....A long way to go to fair value....£ bagger ,in my opinion,by this time next year.......I am keeping an eye on SHG....but immediate profits there for the taking on SRB.....