RE: Maximising shareholder value ?10 Jun 2021 18:00
Of all the days to lose patience with a stagnating share price, tomorrow morning - pretty much the final day an extra resolution can be added to the AGM of a company that has had multiple takeover offers - strikes me as about the most insane. But each to their own. It may well be, of course, that we don’t hear anything until July. However, I can’t quite imagine the despair I would feel selling out at 20p at 8am if an RNS then arrived at 5pm with a circular asking shareholders to vote on a £1+ special dividend.
As Gecko (I think) said yesterday, we're just being held in a new range. Previously it was 24-29, now it's 22-25. All good. Doesn't matter one jot if you've got your doubloons safely stashed away for the day treasure island hovers into view and the very, very short fuse on the palladium cannon is lit.
"Can get my head around why the bod want to potentially dillute us again. Why not get funds from the sale and develop jv assets. Why dillute us shareholders further."
We had this yesterday. I think it's potentially a concern too, if it happens in the near future. But my feeling is that any dilution will come *after* the special dividend. As in: the reason they're not taking the money directly from the sale is because they want to maximise the return to shareholders, including Dmitri and the BOD. But they'll then say "if you want to retain the same stake in EUA 2.0 as it moves forward with the JV etc. you need to reinvest some of your EUA 1.0 winnings.
FWIW, I think Stonk's concern here is entirely legitimate. After all, he is trusting his research, which is saying that the BOD want the right to issue up to 500m new shares for reasons unknown. I don't think we should pretend that it isn't a big deal to ask for the permission to allot that many. It's much more than previously, and, if exercised in full, would represent a huge dilution getting on for a fifth of the company. If that happened before a special dividend were announced, it would cut your 70p to 59p or your £1.20 to £1.02. These are not inconsiderable sums.
My feeling is that MJS has hit the nail on the head: I'm broadly persuaded that they're probably just demonstrating the *ability* to issue that many shares as a defensive move in order to ward off any funny business from the buyer, or Blackrock, or whoever might be trying to accumulate big positions under the radar. Or maybe it's about doing a raise after MT is sold (in which shareholders are perhaps invited to reinvest some of their winnings to retain the same effective stake going foward) to generate more cash for the Rosgeo JV. Fine. I trust the board, and their commitment to minimising dilution has been plain for all to see. But, let's hope they don't actually have to exercise that capacity at any point before the present deal is over the line without very, very good short-term value-accretive reason.
You don't "accidentally" say "MASSIVE dividend" when you don't need to and it isn't both totally nailed on or going to be absolutely gigantic.
What are people's thoughts on the implications of the tsnigri report? Game changing? Is there a possibility, given how far things have come along, that we might actually be selling everything? If MT is jorced up to 15m and large parts of the Rosgeo assets are ready to go, is one of the big boys about to sweep and get the whole lot up and running? What did Anglo raise that $15bn for? It's getting very, very exciting now if you ask me.
Just sold something that was stagnating to buy another 9715 at just over 22p. Rude not to, really. Contemplating exiting quite a large position elsewhere to buy even more. Hard to resist at these prices. My average is edging up towards 5p now!!
What are people’s thoughts on the increased potential to issue shares? I have confidence in the company in terms of minimising dilution (they used up less than half the total available to them in the recent placing) but I’d be lying if I said 500m doesn’t make a little nervous. Is this just a show of strength to to the big boys? Or could it be that they’re saving it to do a big placing after MT is sold and the dividend is paid in lieu of a rights issue or something like that? What do (sensible) people think? Not interested in what any green coffins have to say.
You’re not being diluted. You’re giving the board the ability to issue a very small number of shares relative to those in issue *if* they choose to. Sensible move. Gives them a tiny bit of wiggle room without needing another EGM like they had to recently.
As an aside, can you imagine how exciting it must be being Keith, with a fully-drafted RNS in front of him, with all the numbers and data we've all being waiting for, knowing that at some point he is going to press a big red button that makes all hell break loose? I bet it's an amazing feeling: the anticipation followed by the culmination. Finger hovering over the button. Fat Cuban burning away. Treble Havana Club on ice in the same hand. Dmitri and the boys crowded round in silence waiting for the bomb to be launched.