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Latest RNS shows that Cannacord sold nearly 4m shares @ 13.25. Perhaps someone is having doubts that the deal will proceed.
I have just complained to the London Stock Exchange.
Would be great if Shanta has to retract the RNS.
Whilst I am none-to-hopeful of a reply, it was worth a shot if nothing else.
How does this work?
As far as I can understand it, the RNS reporting system is meant for company news. This last RNS contains no company news whatsoever. Shanta have just given Bidco a free platform to promote its interests which unless and until its bid succeeds, are not the same as the companyâs interests. Surely, this must be against the rules. Does any one know and is there a way to complain?
Peterm35 makes a good point here. Why hasnât an RNS been issued noting all vote no recommendations? Itâs Ketan Patel who is the director of Shanta though. The comments quoted are from his brother, Bad Pal, who is the CFO of Bidco.
Itâs difficult to say.
On the one hand, the share price inching up towards the offer price could indicate that the market believes that the offer will succeed.
On the other hand, the market may think that the offer will fail but, the share price may be rising because of a perceived view that should it fail, the chances of a higher offer have increased.
Based on the time taken for the share price to get to this level and the continued buying by the French, my bet is on the latter.
You should not have to pay to vote. Someone else mentioned that it would cost them ÂŁ20 but, for everyone else it was part of the service.
Doesnât make sense for them to come in this late if they are just arbitraging. They could have got in at under 13p had they acted earlier and by not acting quicker, they could have missed a higher third party bid. I am with Hounddog on this one. I think they have concluded that that Saturn will up its offer.
Some biggish round number sales going through. Wonder if one of the IIâs is trimming its exposure. Should see this in the RNSâs.
Interesting comment re WK.
Do you think the Patels have a deal in their back pocket with the Chinese for WK? Might explain why they are happy to finance with a bridging loan?
They have a chance of a higher bid before month end plus 13.65p as a backstop.
Hope I am wrong but I suspect that if no new bid before the cutoff for voting they will take the money and run.
Nonetheless, I still think that there is every chance that this will get voted down.
I wonder if these hedge funds look at whatâs going on on boards like this as part of their decision making process?
Shantaâs website provides (albeit out of date) information regarding its nine largest shareholders. Their combined holdings amount to 57.6% of the total. Of these, 21.8% are retail investors (10.5% Hargreaves Lansdown, 7.9% Interactive and 3.4% A J Bell). So, of the known shareholders, nearly 38% are retail investors.
As regards the remaining 42.4% of investors, I suspect that an even higher proportion of these are retail investors. Accordingly, over 40% of the total shares could be in private hands.
With only 25% needed to vote this outrageous offer down, the outcome is in the hands of the retail investors. We donât need any institutional votes. That is provided apathy doesnât win.
So donât take 3.51% as a sign of hopelessness and give up. Itâs actually a great source of encouragement.
From the good work done by kadavul we seem to account for around 5.5% of the market cap here. This is maybe one seventh of the private investor total. Multiply our 3.51% by 7 and if we are a representative sample of all retail investors, we are already at 24.57%. We are however, probably more against this here than the average private investor and, we are more likely to vote. So, we need to get our full vote out to compensate for apathy elsewhere. But. we can do it even if all of the institutions vote âYesâ!
I fear that Samson is buying to vote Yes. If the shares are bought at 12.20 and they get back 12.65 in under two months thatâs an annualised return of over 20%. Sampson advertises itself as an event driven investor. I guess it does this regularly.
Does anyone know anything about this principle of law?
I have just stumbled upon it but it seems that Company Directors must ensure that the interests of minority shareholders are protected. They do this by making sure that they do not favour the interests of one group of shareholders over another.
Here is an extract from Patelâs statement as a major shareholder
âFurthermore, the lack of trading liquidity prevents ourselves and other institutional shareholders from being able to exit without risk of causing a detrimental impact on the share priceâ
Here is an extract from Tony Durrantâs statement as Shanta shareholder
âAs such it provides an exit opportunity in cash for all shareholders taking into account the current gold price as well as the operational and other risks inherent in the business.â
As private investors, we can exit our positions at anytime without any risk of a detrimental impact on the share price. Alternatively, we can choose to hold on to our positions taking account of the current gold price as well as the operational and other risks inherent in the business. In this regard, many of us will be guided by the many analysts who, on average, (correct me if I am wrong) value the company at close on 30p per share.
This transaction therefore favours the interests of the large institutional investors (who want to sell out) over the interests of the private investors (who want to stay invested). Private investors are already able to liquidate their positions at full market price so they gain nothing from this transaction. Instead, they lose the option of being able to keep our shares. They are forced to hand them over at a price none of them would accept, just because a few institutions want to cash in.
For all we know, Patel may have threatened the board with a dump of Saturnâs shares on the market if his deal did not meet with their approval. He may well have sounded out some of the top shareholders as well, some of whom, he may have known would sell if they could unload their shares at full market price. Fearing the wroth of major shareholders, the board caved. If you are a professional director in a mining company, you wonât get any new appointments if institutional shareholders donât like you.
I will try to do some more research but would appreciate any thoughts and comments.
Correction. That's ÂŁ3,385,000 worth of shares
Latest RNS. Threadneedle dumped 3.385m shares yesterday @ 13p. Obviously, they were not convinced that the deal would go through.
Voted against on A J Bell. 77,480.
I was wondering where all of the shares that have been bought recently have been coming from too. No one is selling and you would think that the MMs share floats would be exhausted by now.
Price not going up shows that there is great uncertainty as whether the deal gets voted through.
Still canât vote on A J Bell.
Some big purchases going through but no recent Form 8.3.
Maybe someone new is building a stake but hasnât hit 1% yet?
The divi will (or should) be paid even if deal does not go through. For this reason, I have ignored it for calculation purposes.
In my last post, I explained how the marketâs opinion on the prospects of the take-over succeeding could the derived from the share price. This principle can be applied to share price movements from now on. We wonât know what will happen in the end but we will know how the market is thinking.
There are two aspects to this. How the share price moves and, how the share price reacts or doesnât react to news.
Dealing with share price movements first, here are all of the possibilities and what I believe they mean.
Share Price Goes Down towards pre-offer amount. The deal is dead in the water. No one believes that it will go through. A substantial increase in the offer price will be needed to change this outcome.
Share Price stays where it is. The market is uncertain if the deal will go through. I estimate a less than evens chance. Consequently, we might see a small increase in the offer price to try to get it over the line.
Share Price goes up but remains under the offer price. The market has concluded that they deal will likely go through. Satan (sic) Resources is unlikely to increase its offer. Not all is necessarily lost though (see below)
Share Price goes up and exceeds the offer price. The market has sniffed out a third-party bid.
It is also important to watch out to see if the share price is reacting to news or not. Things which should move the price (up or down), in normal circumstances, include the gold price, company news (results, drilling etc), the oil price and whether gold mining stocks or up or down in general.
Share price is reacting to news. This indicates that the market does not think the deal will go through.
Share price is not reacting to news. This indicates that the market thinks that the take-over will succeed. The offer, is stabilising the price.
I am inclined to think that there wonât be another bidder. Gold mining stocks are too bombed out at present. However, if there is one (or hopefully several) it will come late on. Potential bidders will be watching the share price movement as outlined above for clues. If the price goes down, they will know that 13.5p is considered derisory. This means that a substantial increase would be needed. On the offer hand, if it seems that 13.5p is acceptable, they would not have to offer much more.
I am staying put until the bitter end. My favoured outcome is âno dealâ but if Patel does win, I wonât have lost money at 13.5p.
Good luck all.
Wincanton
Pre-offer / Assumed fall back price if offer fails: 297p, Offer Amount: 450p, Current Price: 438p, Profit if offer goes through: 12p, loss if offer fails: 141p
Shanta
Pre-offer / Assumed fall back price if offer fails: 12.65p, Offer Amount: 13.50p, Current Price: 13.10p, Profit if offer goes through: 0.4p, loss if offer fails: 0.45p
Analysis
The low profit to loss ratio on Wincanton indicates that the market believes that it is highly likely that the deal will go through.
The almost equal profit to loss ratio on Shanta indicates that the market is highly uncertain as to whether the deal will succeed or not.
Conclusions
The recent good news (record production and drilling results) means that in the absence of the offer, the share price would be over 12.65p. Accordingly, the loss if the deal fails is much lower than 0.45p.
New institutional investors may be buying as they see this as a good each way bet. A short term profit if the deal goes through, with some chance of a higher offer but, a good long term investment if it doesnât.
Prediction
The take over fails and Patel is toast.