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The Downside is that NN are clearly playing hardball. And have been since the shares went into suspension. To us, the SP is predicated by the Pd & other metals in the ground, minus costs. To wary institutional investors, the SP is effectively controlled by NN/Rusal, who have the local infrastructure/authorities, & the flanks approval, in their pockets. And who have no particular interest in acquiring more PD reserves, while the world is in recession. So it's a power play, with NN feigning disinterest, & our BoD grimly hanging on. As long as they are solvent, they can afford to do so. Could last a long time, but NN are up against the fundamentals. And the MM's trying to stimulate interest, by running the SP up & down. Bless them!
If there was a broad unanimity of view amongst PI's, forming a block greater than 10% of the issued share capital, this could become a significant factor in the T/O negotiations. We may arrive at a point at which our interests diverge from those of the BoD, although I agree they have played a blinder hitherto.
Good point, B1ll. At some point we will receive a recommendation from the BoD on the price we are to receive for our shares, assuming a T/O is to happen. The question then will be - do we go along with it, or hold out for something better? The effective SP the BoD receive for their strategic holding could well be superior to ours.
The interests of the BoD & PI's may diverge if the BoD are offered a substantial price for their strategic holding, above whatever the current SP might be. Just speculating. For choice, we need 2 bidders & a hostile take-over! Anyone speak Chinese?
The BoD have a strategic holding of 20% of the issued share capital. The value of this block-holding to a potential bidder in a take-over situation probably outstrips what it would command on the open market. Sales of this type can be concluded privately.
I agree - which means that Sushlov could become a major shareholder in NN overnight, if he chooses. Seat on the Board etc. He's a bright upcoming guy & could be an asset to them. Potanin/Deripaska/Ambramovic could open many doors for him - present dealings could be small potatoes compared to his future. An oligarch in the making, maybe.
I love this slow creep in the SP - no spikes. Out here in the sticks, shielding my son, the distant rumble of traffic suggests lockdown is coming to an end.... Supplies of gin & tinned haggis are dwindling, so my Captain Oates moment is approaching....if I wear a balaclava, I wonder if they will let me in the post-office?
Great chance to top-up below 20p. My impression is that some are cashing in too early, in favour of EEE. Their choice, of course. But it seems the flanks remain an issue - it looks as though Abramovich & his chums may have control over the approval, but regardless the Regional Authority are right to give it some thought. I wouldn't want an open-caste Pd mine on my door-step until the infrastructure & environmental issues have been sorted/paid for! Not a formality, as some describe it.
20p was always going to be a resistance level. PI's now largely invested, for now, my guess, & selling going on as people re-balancetheir portfolios & day-traders net their profits. The big boys will have had their Mon AM strategy meetings, & may come out to play later....All good.
Thanks Greggs - I would love to be completely wrong, believe me! But this final rubber stamp has been imminent for far too long, with no reason given. You have to ask yourself - why? NN are the natural purchasers for EUA - they control the local infrastructure, smelting facilities, and, rumour has it, the local judiciary. And they will want to acquire it at the lowest possible price. It's just business, Russian-style. Great people, but a different way of doing things.
Let's hope events prove me wrong!
A great day for all LTH's, & commiserations to all those who have had to sell down their holdings during the long wait. But don't necessarily assume the flanks are going to be released any time soon. Or that there will be a bidding war. And unfortunately the flanks bring the extra value. It must be reasonably evident that NN control the approval for the flanks, which will scare away other potential major investors. NN, as the largest Pd producer in Russia, the world's largest supplier of Pd, & also a major purchaser of Pd from other companies, effectively regulates the Pd price world-wide. I doubt that it even needs the Pd currently within the flanks, given the current recession. But it doesn't want an unregulated Pd price war, & nor will the Russian govt.
So my guess is that, when it has accumulated a sufficient holding, it will make EUA an offer that the BoD cannot afford to refuse. Much grinding of teeth, but the BoD must have seen this coming for some time. And then , after the takeover, - marvellous to relate - the flanks are approved, & the value is reflected in the NN SP.
But loads of value in this share, even without the flanks, and happy days to all. If I'm right, question is - do we accept the Board's recommendation when it comes? Or defy NN & hold out for a fairer deal?
All speculative, of course.
A major determinant of the future SP will be the approval on the flanks. Many have posted on this BB, stating that this is merely "a formality". Surprisingly overdue, this formality. My guess is that NN have got it locked up. This would give them some leverage over EUA & will scare off the big institutional investors. This will impact the value of our shares, but still, hopefully, lots of added value to come.
As for the eventual outcome, I'm guessing some kind of share-swap with NN, who are short of cash after the recent oil-spill. This may suit investors with CGT obligations, better than cash. Happy days ahead, nonetheless.
The BoD/Nomad should be pushing to get the suspension lifted, in the interests of a free & transparent bidding process. A lot of people, including myself, have got sizeable sums of money locked up in this company, for far too long. And I trust a free market to determine the SP, not the BoD and their interlocutors, whoever they are.
The bidding process should be open & transparent - that's why the shares have to come out of suspension. Otherwise they're going to come back with an offer and say "Sorry guys - this is the best we could do". And you'll never know about the back-offers & side-deals. It's Russia - this is the way they do business.
Normally in a take-over, the shares would be traded until one party reached 30%, at which time they would put an offer in, based on the highest share price in the last 12 months. There are various safeguards to protect private shareholders, such
as.
1)Favourable deals for selected shareholders are banned.
2)All shareholders must be given the same information.
3) The bidder must make a cash offer (as an alternative to any ************** offer)
Here, it seems, we are to put our trust in the BoD & their chosen bank.
Maybe, SGD27, - good thought - wondered about that, although it does say that "she was one of the patients treated with the drug, in trials earlier this month". I'm guessing that they had one or two individual pre-trial trials, to make sure that they had got the mechanics of the delivery system set up properly, before launching into the trial proper. You wouldn't want to get half-way through, before discovering that you weren't delivering the drug into the lungs. One has to bear in mind that much of the aerosol will be simply deposited into the nasopharynx, if you don't get the particle size right.