Member Info for DrQu

I thought when crossing 30% ownership the relevant party is only incumbent on matching their own 12 month high of purchasing shares and not that they are obliged to pay the actual 12 month share price high.

PS - BHP/Newmont are never going to outbid the CCP if the latter sees control of this asset as strategic, that is unless these companies themselves are backed by state entities with equal motivation. For the latter to happen, well let’s just say it’s not gonna happen quickly. If the Chinese go in with an official bid that shocks everyone, is enough to scare the rival companies from even entering the race and leaves the board / most share holders extremely happy they might just grab it.

Yes Rodney, as I outlined previously I think that is a very real possibility - a late return bid at a price no one expects becomes even more likely when you view the game from a geo-political perspective as opposed to simply another company takeover.

Exactly - it isn’t how they work. That’s why I’ve said it’s an asymmetrical play, which is what you would use when the stakes are very high and the chances seemingly not very good. Again another Warren Buffett (and good luck to you as there is nothing wrong with that). If the Chinese control the Ecuadorian copper market that’s the economic equivalent of placing medium range nuclear missives in Cuba in the 1960’s and pulling it off. That’s what you fail to recognise.

Hi Add - you ask ‘what do they do’ - just as everyone is snoozing off their Christmas Lunch/tea etc they give the on-call duty officer on the UK take over panel a ring and they offer a bid that they know will be acceptable to the board and probably most shareholders. Just like you know one will be expecting it. Yes it will have to be a premium on the existing share price but does that really make it expensive? If they snatch the prize and avoid this thing going into auction - they grab assets that over the next ten years could reveal half a dozen tier one’s discoveries. Your thinking like Warren Buffett, and no disrespect in that, but the Chinese are thinking like Sun Tzu and in this particular game, they are right to do so.

I agree they won’t be happy about that Add (who wants to have to pay top dollar). I also however believe the way to first of all win this and then second achieve the win at the best cost is to play smart - take your opponents by surprise and at a time their ability to respond will be at its least effective. That way they avoid the auction and that’s the best way to achieve the lowest cost. The best way for them to get the asset and achieve the lowest cost just happens to coincide. Whether they manage to pull it off - well that depends on all the other players.

The Chinese believe in the meantime a lot of potential assets of the future may get sold off - that’s why they’ve moved.

You’re on the right track - the primary objective is to take the prize - yes they want it as cheap as possible but why would they gamble on pennies on the share. After all a 60p+ offer looking good against 26p and low expectations after initial excitement is still low and avoids completely an auction if the plan works.

I fear they will do what your doing - completely underestimating their opponent.

Round one to the Chinese. Every interested party is now slowly falling back to sleep after the initial excitement. The Chinese trying to pull a fast one have made themselves looked rather stupid and we’re roundly ticked off publicly by a no nonsense SOLG board. No one expects more than a marginally improved offer from the Chinese now (if one at all) and why should any rival strike before a Chinese official and marginally improved bid. Too many already have one eye on the Christmas holidays. Share price might creep up slowly for the next couple of weeks but without any news nothing much. Then at the very last minute the Chinese drop a 60-90p shock bid - I don’t think many would be too unhappy. Those that will be - BHP, Newmont, the US gov - if the timing is perfect what are they going to do.

If I am right expect a very quiet couple of weeks then as the Chinese step up on securing the IUs, and if we are lucky, a few leaks emerge, and share price gets to 40-45. If we are very lucky the US will mobilise quickly and organise a counter bid to quickly check the Chinese offer. If they are not too late wow, it could be very good for us. If they are we probably do ok to good.

The key to understanding how this one plays out is to think like a geo-political strategist not an investor. At the moment the Chinese position looks pretty weak when in reality, at least for the moment from the Chinese perspective, it’s so far going according to plan.

Indeed Rodney and I do most definitely hope the board have the necessary ammunition in reserve to boost the share price over the coming weeks - the higher it is the more likely a rival bid will emerge to what I think will be a premium Chinese bid to begin with. The current management team do seem to have performed very well of late - they are certainly going to have to be on their game over the next few weeks in handling this can of worms.

Hi Mathers - let’s hope you’re right and I have no doubt that BHP believe they have the right game plan. How long though has it been on the shelf gathering dust. The Chinese are not operating without purpose here and they have the initiative. I believe if it was simply a matter of hard cash they’d pay tomorrow.. This is a strategic asset and they know Trump would move heaven and earth to stop them. They have to be smart and at the right time strike quickly with something unexpected. At the moment most expect, because of their initial lousy bid, for them maybe to go between 40 and 50p next time round. What if it was a quid and made on Christmas Eve with the instruction that the board approve within a matter of hours and convene an EGM within days. I think they’d move pretty fast. Could BHP or any rival company mobilise what would have to be a pretty substantial counter offer within that timeframe over Christmas. It’s not impossible but is it likely. The Chinese have to be bold to out manoeuvre the Yanks here but a chief exec throwing vast amounts of company money in such haste, well such boldness might just cost them their job. Securing the company is China’s priority, avoiding an auction is more about time than money, though I am sure they’d like to achieve both.

The Chinese will be back in a few weeks. In the meantime they will be doing everything they can to suppress share price, secure backing and to ensure their major rivals remain relatively calm (assuming they have not knocked them out of the game already). I hope the board has plenty of ammunition ready to fire as they need to pump this as high as possible in the mean time. The Chinese will be looking for a quick decision when the time comes, essential if they are to pull one over on the Americans (a tall order given the geo-politicals). So the bid will have to impress share holders/rivals alike. For the Chinese, victory will be just acquiring the company, and the secondary objective, a price premium, comes from offering just enough to deter a rival from making a quick decision to enter the race. If share price remains relatively flat I see a bid somewhere between 60 p to 85p and scaled accordingly to price at the time.

Perhaps Q they maybe reaching out to multiple parties and establishing IUs over the next few weeks.

This is not a simple acquisition between rival mining companies. The geo-politics on this one trump everything (pun intended). If the Chinese are in this to win the prize, which they are, one things for sure, it has to be an asymmetrical play. They are playing in the USA’s backyard and the game plan must be totally unexpected.

A ridiculously low bid has everyone scratching their heads. On the one hand rival companies and governments are on their guard but at the same time they’re all now sitting back waiting for the Chinese to make their next bid. The Chinese still retain the initiative as well as almost certainly having a much clearer picture of what the SOLG board asking price is and time to approach others. They are not interested in pennies per share if they truly want this one. Expect a bid 16:59 GMT on the 26th Dec, holiday time in the west, that will be double the price as is (or at the very least at a substantial premium). Expect an immediate yes from the SOLG board though is it even needed if 51%+ irrevocable undertakings have already been agreed over the previous last few weeks, (at a high price though still probably cheaper than an expensive bidding war) with the usual NDAs in place. Even if Trump is no sleepy Joe, it’s the Christmas holidays, who’s he gonna get quick enough on the phone to stop such a well prepared/executed plan perhaps months in the making.

When was the move first announced? Just wondering if the move to Switzerland was the board first getting wind of an incoming bid and was motivated out of preparation for the east v west tug of war.

I agree - the international politics & strategic interest is absolutely key to how this will play out. This should however, at least in theory, play out in the interests of the small investor. If you think the rivalry between mining majors could stimulate a bidding war, what about the world’s two most powerful countries who are vying for global supremacy. Does anyone really see a Trump administration allowing the Chinese to take out what could be a multi-tier one copper-gold play in what they see as their own backyard without moving heaven and earth to avoid it. Does anyone see the Chinese taking that lying down. The US are going to want a Newmont bid, though a joint venture with existing owner and/or BHP would all be acceptable, as in the end would the Aussies on their own. I said, in theory benefits the small investor, as this all leads to multiple different plays/pathways. The influence of the US and/or China could suppress opposing bids though I doubt that - it may well be that it’s Equador who turns out to be the prettiest girl at the ball rather than SOLG. I still think at present this only serves to guarantee additional bids, the problem maybe that whoever wins in the politics does not necessarily translate to the most attractive option/bid for us. We will see.

Alternatively, is it a move by the SOLG team to make the Chinese return with a much higher bid by suggesting BHP are indeed preparing their own counter bid. One way or another I suspect it is related.

Quady you will find that the principle members of the abolitionist movement were driven by their Christian values (Clarkson, Wilberforce, Sharp, Gordon etc etc). Saudi Arabia officially abolished slavery in 1962 and Mauritania in 1981, both under pressure from the Christian west. If there had been no muslims selling African slaves there would have been no Christian’s buying them. The latter may also be in excusable but whilst they woke up to the fact, and did everything in their power to stop it, the other unfortunately did the opposite.

Hi Quady - you have not addressed the point, merely deflected. You appear to be suggesting that fascism is just an awful lot of state intervention imposed by an authoritarian regime. First, that would also apply to what everyone would recognise as every revolutionary leftist regime that has ever seized power. Secondly it’s still just a greater scale of state intervention, your own yardstick for measuring where a political movement lies on the spectrum. So you still have Fascism placed squarely on the political left. For someone well versed in the roots of fascism I was hoping for something better than the tired and ridiculous mantra that only fascists argue fascism derives from socialism. Why would a fascist ideologue seek to propagate the idea that they have a political affiliation with a philosophy they consider themselves diametrically opposed to - it is in the interest of both such parties to distance themselves as much as possible.