Member Info for 100notout

Whatamess - If the deal doesn't go through the market should take that as a sign of strength as the LMI holders believe that the current terms do not reflect the true value of the company. We could face another rights issue but I would prefer this route to the deal going through. If LMI get a few decent results going forward it should become easier to obtain financing on better terms. I think that we could see a large correction in the Pt price in the next eighteen months when this happens banks will be throwing money at us but we probably won't need to borrow that much if at all.
I think that this whole SGL debacle has unfortunately held back the LMI price from rising to where it should be. I would have imagined that the price would be in excess of 125 now considering some of the positive developments that have happened. I think it would be a mistake to sell assets off to Froneman. I am taking a long term view with regards to LMI and believe that this could rise a lot more than most could imagine. Sometimes its best to sit tight and be patient. I remember holding SOLG for a long time and when I broke even at 4 I sold off. Three months later the rise was catastrophic.

Rastuss - Chewbacca with a rock drill could do wonders.

Maybe Froneman has known of PIC's dilemma for a while and that's why SGL raised more cash via the last streaming deal and placement in order to buy certain LMI assets as he seems desperate to obtain the smelters and refineries.
It is looking more likely now than ever that the takeover won't happen.

PIC were probably on the dark side after reading your posts Rastuss and now they can see the light...

PIC should say no and then put a motion forward to sack the Bod asap because no doubt they would again do something detrimental like sell of the smelters and refineries to Jabba.

Lets not forget since the proposed takeover 17 months ago the bp has increased and there are no banking covenants which again the doom mongers were feasting on. It is SGL that have had huge amount of casualties, strikes, high debt, US law suites issued, script dividend and a share placement in this time. LMI have also sold the Petrozim assets for circa $22m which were written down to zero and have net cash of $70m after the first half which is traditionally their weakest. How on earth can Froneman justify that the current offer is fair. The original SGL takeover value for LMI was £285m 17 months ago it surely has to be worth more today. He must be either delusional or taking the proverbial...

It is rather strange that a week ago LMI stated that there would be less redundancies and since the PIC press speculation they release a statement with regards to making 4100 redundancies. It seems as though Froneman is pulling the strings already at LMI. Froneman states that he is drawing a line in the sand with regards to the offer but only last week SGL reserved the right to offer more if another bidder were to emerge. There are too many contradictions. LMI has survived so far and if we had listened to the so called experts like Major LMI would have been under years ago. They are a profitable company with net cash with decent assets they just have a poor Bod. SGL have a huge debt pile and haemorrhaging gold mines. Their actions are scaremongering nothing less... Desperate tactics, but what do you expect from this bunch.

Is in the press again basically saying LMI will be bust without them along with the clueless Peter Major. They are obviously getting desperate because they know it's not going to be plain sailing getting the 75% of votes needed. They would under normal circumstances need 90% but they didn't arrange it that way did they...

Once Pt rises it wouldn't be hard to be on a pe of 1. With regards to depreciation and amortisation they will be negligible as the write downs have been brutal. One only has only to look at Petrozim being written down to zero and then within a year being sold for circa $22m. This takeover stinks and I am glad that I am not alone in my assumptions. I would prefer to inject more cash via a rights issue than to accept this offer on condition the current Board stepped down as they are utterly clueless which they have proved time after time. The only ones to benefit with regards to this takeover are the Board which will receive R130m and Froneman whom seems to be batting on a sticky wicket. How the Board can accept R130m after their dismal performance highlights them for what they truly are.

I agree Whatamess, SGL should offer at least 2 shares. Having said that I hope PIC say no and kick the inept Board out. This latest news with regards to the job losses again paints a bleak picture. Their spin doctor failed to mention that they initially planned to cut 5300 workers. It seems that the Board want the deal to go through so they get their rewards via the R130m payoff. Their actions have been so transparent that their desperation is now embarrassing. They won't do the honourable thing and leave as they are in it for themselves. The analyst being interviewed alludes that LMI are on a pe ratio of 1. It is absolutely disgraceful that the Board can recommend this deal to its shareholders. It would seem criminal to recommend this deal as they have gone through the worst in the PGMs cycle. They need to look at their previous actions and comments especially where the last rights issues were concerned. I was under the impression that PIC were instrumental in organising this transaction they will now probably have to say no. SGL are facing US legal suites from disgruntled shareholders it will be LMI's turn next...

I wouldn't Rastuss as I have principals, unfortunately the inept LMI Board don't have any it would seem.

Thanks Rastuss for clearing that up.

No wonder the management want the deal to go through as they will get a windfall of R130m. Its bloody obvious where their allegiance lie isn't it... They completely ruin a company to be rewarded like this is a travesty. Shows you what kind of Board they are doesn't it. I hope PIC say no and replace them asap.

What LMI have which SGL don't have is the metal processing facilities... The synergies would help SGL significantly and he needs this to go through especially now considering the poor performance of their gold mining operations.

The initial takeover value was £285m and a lot of positives have happened since. Froneman is being delusional if he thinks that the current offer which values LMI at circa £170m is fair...

I don't think that my views have changed with regards to the bid. I have been saying for a long time that the offer falls far short.

It doesn't take much to outrage Du Plessis as far as LMI is concerned does it. There is no way that Jabba wants to get out of this deal as he needs it far more now considering the status surrounding the gold mining operation which is more of a liability than an asset. Even if PIC vote in favour of the deal they still have to get another 45% of the votes. Its looking less likely now than it has since the offer was announced.

If PIC are having doubts it says it all really doesn't it considering their large exposure in SGL. Jabba should be paying you Rastuss...

Froneman will have a figure in his head of what LMI is worth to him. He knows the current terms are onerous to LMI holders and that he can take advantage as the LMI Board are inept. The last raise in the offer was meaningless in the scheme of things. I would be very surprised that he wouldn't be prepared to offer double what's on the table at the moment if another bidder came to the fore. Why would one want to accept shares in a loss making company with high debt, a weak gold mining division and US law suites upon them when we are on a potential pe ratio of circa 4, no debt, large PGM resources, Smelters, net cash etc is absolutely absurd. Froneman can go and foxtrot Oscar...

That's interesting Whatamess. I was under the impression that PIC were responsible for initiating the takeover in the first place. It looks increasing likely that even without PIC that the deal will not go through. It will be interesting to see if Jabba keeps his word and walks away. I doubt it though...

Froneman said he wouldn't come back if the current terms are not met with unless another suitor turns up. I personally trust him about as far I can throw him. Even if he came up to the original £1.00 that was tabled seventeen months ago it would still vastly undervalue the company. The time you take the cash and Furyuya investment out of the equation you would be left with the remainder of the company being worth £100m. The furnaces etc are worth more than this so you get the mining operation and PGM reserves for free. What I find most disturbing about the current situation is that the lacklustre, futile, impotent and Sisyphean Board are the ones responsible for negotiating on the shareholders behalf. They couldn't even organise a piss up in a brewery and history tells us that they always cock things up and is best to do the opposite as they suggest. It would be good to see PIC kick Froneman into touch and implement a new Board with vision.

Rastuss - With regards to debt LMI don't have any unless you include the steaming deal. I agree that the streaming deal is expensive but it was probably the best they could manage at the time and don't forget it was done by the current Board whom I have little respect for as you rightly point out their misjudgement and mismanagement has caused serious problems. I think you overplay the redundancies issue as there won't be a need for it if Pt rises. I personally wouldn't make them as they can survive until the rise in Pt prices. The last thing that they want to be doing is paying out large sums to make workers redundant to then reemploy them when the Pt price increases. LMI have net cash of $70m and are going into the stronger trading half. SGL have had no problem in raising money and I don't see why LMI should even if they have to go down the route of tapping holders for more via a rights issue. If PIC are seriously thinking of scuppering this deal they must believe that LMI has an independent future. As you know PIC also have a large holding in SGL and if they think the deal is unfair then other holders with no SGL position are going to think the deal doesn't represent fair value. Institutions will be taking a long term view not a short term view. Why sell now when potentially you could sell for ten times the price in 3 years time. If PIC say no I will be buying more as the LMI price would at the very least be double if not treble its current price of 62 if it were not for the SGL bid. The price movement on Friday says it all really doesn't it? SGL down and LMI up on the news that PIC may say no.
If I was a potential bidder I would have waited until now as all the hurdles have been cleared. It is also quite telling with regards to SGL pointing out note 3 of rule 32 under the takeover code. If another bidder offered 125 in cash I would very much doubt that Froneman would walk away... It could get interesting here.

Are playing hard ball and it could be their misfortune. They originally offered the equivalent of £1.00 per share 17 months ago. They have to take ownership of why their share price has fallen. The gold operations have been poor with numerous casualties, they have had a prolonged strike which has caused bad blood with AMCU and they are highly leveraged. They have recently raised cash and last year issued a scrip dividend which in turn gives LMI holders a smaller percentage than was originally agreed with the Board. When the offer was made LMI had banking covenants that were becoming a concern for investors, they don't have them now and since the offer was made the PGM basket has risen and the need to make mass redundancies has reduced. I believe LMI under the right guidance could have a very bright future for all stakeholders. If I can see that this deal is flawed I am certain that others can see the same and lets not forget the heavy write down of assets, this seems suspect to me as confirmed by the Petrozim transaction which was written down to zero and within a year being sold for north of $22m. A new Board with vision and determination could do wonders here. When you take out the cash and the Furuya investment the remainder of the company is being valued at circa £100m. Ten years ago the LMI Board rejected a bid for $10Bn and have since raised $1.7Bn in the form of rights issues. This is not the time to throw in the towel. When the Pt cycle changes and it will because history tells us it will holders will be glad they didn't accept this low ball offer from SGL. This was merely an option for SGL and if certain factors went against LMI they would have pulled out or offered an even lower bid because that's how they operate. The overall landscape for LMI has vastly improved and the institutions need to take a long look and do what's in the best interest for all stakeholders... GLA LMI holders.