Member Info for slowlyslowly

Thanks, the opportunistic angle makes sense. I'm being thick though: could you explain how this cuts their costs?

Of course, the title for this thread is wrong. They're not purchasing shares at a cheap rate. They held options they could exercise at 22p, and they did. If an asset sale was agreed, the detail of their option agreement almost certainly says that they can exercise at that point to benefit from any sale, so they get to buy shares at 22p and cash in at whatever price La India is sold. They get to do that regardless of when they exercise the options. What they have just done is exercise today, rather than wait for the project to sell. Given we're regularly reminded there are no guarantees it will sell, and would probably fall below 22p (short-term, at least) if they announced cancellation of the sale process, to my mind that expresses confidence.

Quite right. Shocker of a deal. The important thing for people voting is to remember there are two distinct meetings, and to vote against at both of them. Only one of them has the special resolution that requires 75% of votes cast in order to pass, so make sure to tell the broker your votes for both of the meetings.

No, the merger agreement shows an assumed value for Mustang of £1m, which is how they calculated that 1.91:1 is the correct ratio for the merger to give the Mustang listing that value.

Going off the Cykel price pre-merger of 9p, which becomes 4.9p after the 1.91:1 split, with 13m Mustang shares in issue, Cykel gave Mustang shareholders a value of £650k in aggregate. Mustang shareholders don't come away owning nothing having given their shell away; they come away with £650k worth of Cykel.

It was always the plan for Mustang to be an acquisition company that would take over an existing company, and it is standard for the board of the company they buy to take over running afterwards.

RNS of 23rd Feb 2023 said:

"Trident holds a 60% interest in a gross revenue royalty over the entirety of Thacker Pass. Assuming LAC exercises the partial royalty buy-back (US$13.2 million attributable to Trident), then Trident will retain the equivalent of a (net) 1.05% gross revenue royalty. At current lithium spot price of approximately US$54,000 per tonne LCE, once at full production, the (post-buyback) royalty will generate over US$45 million per year to Trident."

We have 293m shares in issue.

If they buy back part of the royalty, that gives us $13.2m (which is 4.5c or 3.6p per share).

Thereafter, we are forecast to receive over $45m per year. That's 15.4c per share or 12.2p. So over the first 4 years, Trident will receive over 49.2p in royalties, and a further 3.6p from the buy-back - 53p or more. And that's before any of the revenues from any of the other royalties or offtake agreements are taken into account. (In 2023, we had net revenues of 2.6p per share - if that repeated over 4 years that's another 10.4p, so then we're up to 63p over those 4 years).

Basically, anyone buying this company for 49p will have got all of that back within 3 years of Thacker Pass going into production, and thereafter be on a complete free carry for 15p per share of income every year.

I cannot see how the directory can genuinely say that they are acting in shareholders best interests to recommend selling the entire company for just 49p.

With Charles Stanley Direct, they don't notify shareholders of votes or facilitate you placing your votes. You can't use the proxy voting form on the Trident website, because you are not the actual shareholder on the register - Charles Stanley is (on your behalf). So they need to place the vote for you.

What you do is send them a secure message, telling them that you wish them to vote on your behalf at the general meeting and at the court meeting, and you wish them to vote against all resolutions at both meetings. They then arrange it behind the scenes for you and do it. It's not as self-service and easy as some other platforms, but you can still place your vote. They need at least a week's notice (from memory) before the voting deadline, so send that secure message sooner rather than later.

Jock, completely agree on this being a great deal for the former holders of both companies.

On the consolidation, as you say, each Cykel shareholder received 1.91 Musgang shares for every Cykel shares held. That means they now have nearly twice as many shares. To work out the effect of that on the share price (for the purposes of comparing the share price before and after the deal), each of those shares needs to be worth fractionally over half, to make the value of your holding stay the same. (If you held 1000 shares at 9p, they'd have been worth £90. After the deal, you now have 1,910 shares. For those still to be worth £90, each one has to be worth 4.7p).

Cyk was at 9 pence _before the 1.91 to 1 consolidaton_, so that 9p is 4.7p after that consolidation.

MUST was 30p prior to suspension, at which point they had £1m more cash than they had when the deal went through, so their one remaining asset was their stock exchange listing. There were just over 12m Mustang shares, which at 6p gives a value of £720k for Mustang. With the enlarged share capital it's about £1m. For a cash shell with little to no cash, that's a very good deal for Mustang shareholders, making 6p an excellent price all things considered.

... at a premium, note. The classic placing that hurts existing holders comes in below the current bid price so that placees could if they wished sell for an instant profit. They certainly couldn't sell for 6p. Personally, I think this shows demand for the shares, and will help build some liquidity. Indeed, the spread has tightened since this was announced.

If all the retail holders who think their vote too small to make a difference all vote against, that could be enough to get this kicked out. I too was looking forward to many years of dividends here.

Only 26% of shares have said in advance they'll vote in favour. It's so self evidently a poor price that I think we can assume most of the other 74% are unimpressed. The inertia of a poor turnout could see this pass, but if all who fell robbed actively vote against I reckon we're in with a good chance.

When I've been in other shares with a takeover offer, the board have usually secured at least 40-50% in advance making it really unlikely to fail. This one is very different and so the chances are good as long as everyone votes

For Interactive Investor, it is also available.

On the website, open the Portfolio menu at the top, and under Tools (right hand of the 3 columns) is "Voting Mailbox". You get a list of positions you hold that have votes open - click the vote link (which opens a new browser window on the Broadridge Proxyvote site, choose your votes, and click the Submit Vote button at the bottom. Again, note that there are two separate votes to be cast - general meeting and court meeting.

With II, you need to be opted in to voting before you can do any of this. To opt in, on the website, click the person icon top-right when logged in, and under Admin choose Personal Details and Preferences. Within that, under the Preferences section, choose Update Your Preferences. Tick against "I would like to subscribe to the Voting & Information Service" and Save. If that doesn't trigger the voting options above, send them a secure message to say you've enabled voting and you'd like to vote in the Trident meetings - please could they add those to your account.

Correction, BlackRock have been selling - down to 1.58% as of yesterday. So they may not still hold by the time of the meetings.

Interestingly, we've not heard of the voting intentions of Ruffer and BlackRock (5.32% and 3.95% respectively). If they'd committed to voting in favour, we'd have heard. That doesn't mean that they will vote against, though. I don't know much about Ruffer (as an activist, I know a little about them as a fund manager), but BlackRock certainly tend to use their votes rather than let things just happen around them. If those two together were to vote against, that would be enough votes against to counteract the undertakings, so it would just be a matter of raising enough votes to counter any others who vote in favour.

Thanks for the correction, Rodney. You're quite correct. Of course, the point that the project is substantially derisked and therefore the anticipated revenue doesn't need discounting much when valuing Trident's royalty still holds.

Most retail will hold through platforms (Hargreaves Lansdown, Interactive Investor, AJ Bell, etc.) and will do their proxy voting through those. Some platforms they have a section of the website where they put online voting forms and it's easy to find and do; others you have to send them a secure message to give your instructions - so it's worth people knowing how their platform does voting (if they've not voted at a meeting before) and making sure they use their vote.

49p is far too cheap. Thacker Pass alone will give nearly that in annual revenue once it's in phase 2 production, and that's heavily funded by the US Government with offtake in place from Ford (so substantially derisked).

They need 75% of votes in favour at the court meeting, and have irrevocable undertakings from 26.1% of the register. If another 8.7% of the register turns out (by proxy) and votes against, and nobody else votes in favour, this falls. I think there's a realistic chance to sink this, and we should try. This is the kind of share you can hold for many years and enjoy the dividends, and so selling out for 49p cash (which, for some holders, will be less than they bought for), is daylight robbery.

Use your votes, folks, and let's get this cancelled or a proper deal on the table.

Agreed, @SussexInvestor. The two encouraging details in today's announcement are that they've received a series of indicative proposals from Brookfield (which means they're not just going "yup" to the first offer they get), and that it is now a competitive process (which always helps to ensure that a fair price is reached).

@Trevally - no, it's not correct. It's yet to update the shares in issue from the 12m that Mustang had, even though we've now got all the Cykel shares added to the Mustang register. Then the market cap is being worked out off the diluted share price but the undiluted number of shares.

No, the point of the ratio is that they worked out what proportions of the new combined company would be owned by the previous holders of each (Mustang, Cykel), and the way to combine the shares to achieve those proportions was to multiply the holdings of Cykel by 1.91. If they also multiplied up the holdings of Mustang holders, there'd be no point in the whole multiplying thing.

Also, the market cap of Mustang prior to suspending is not relevant. When they suspended they still had most of the £1m cash they IPOd with, and there was the prospect of an energy deal. Trying to get the VRFB deal to close has used most of Mustang's cash, so Mustang's value in the whole enterprise is that they bring a main market listing to the table. If they'd instead wound up Mustang and returned cash to shareholders we'd have each got near to zero per share. So pretty much look at Cykel's cap prior to the deal being announced, and divide by 420m shares.

That's the starting point adjusting for the deal. The real unknown is what the market will then make of the prospects of the new Mustang, owning the Cykel business, and where the share price will go from that starting point.