Member Info for TheMadStork

Per the 29th Sept RNS, the 14 week fixed term on this contract will expire next week (Assuming it was effective from the 29th, which is unclear in the RNS). When will NCYT have to announce the 10 week extension by?

TTS01:

Yes I also had a look and can't find an example of dispensation being withdrawn. However, I also can't find an example of an FSP going longer than 6 months without a formal update on the process, even if it's just basically "we're still in discussions with interested parties" a la BOTB's update recently.

You do raise a good point re Covid - I would imagine that more latitude than usual may be granted. We shall just have to wait and see I suppose.

Investor12:

From the 1st July "Statement on formal sale process"

The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement and will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the Takeover Code for so long as it is participating in the formal sale process. Following this announcement, the Company is now considered to be in an "offer period" as defined in the Takeover Code, and the dealing disclosure requirements listed below will apply.

TTS01: See my post above. You are spot on that EUA have been granted a waiver of Rule 2.4. There could in theory be informal bids. I was responding to the claim that formal/firm bids do not have to be RNSed, which is incorrect.

This is speculation on my part, but the Takeover Panel has discretion to withdraw any dispensations it grants at any time. I would think that at some stage they will do this should an update on the FSP not be provided. This would then provide clarity on the bidding situation one way or the other.

There could conceivably be informal bids. Here is rule 2.4, which EUA have been granted a waiver of:

2.4 THE ANNOUNCEMENT OF A POSSIBLE OFFER
(a) An announcement by the offeree company which commences an
offer period must identify any potential offeror with which the offeree
company is in talks or from which an approach has been received (and
not unequivocally rejected).

(b) Any subsequent announcement by the offeree company which
refers to the existence of a new potential offeror must identify that
potential offeror, except where the announcement is made after an
offeror has announced a firm intention to make an offer for the offeree
company (see Rule 2.6(e)).

(c) Any announcement which commences an offer period and any
subsequent announcement which first identifies a potential offeror
must:
(i) specify the date on which any deadline thereby set in
accordance with Rule 2.6(a) will expire; and
(ii) include a summary of the provisions of Rule 8 (see the Panel’s
website at www.thetakeoverpanel.org.uk).

So as things stand EUA do not have to RNS any approaches that have been made. It is therefore possible that there could be an informal bidding war.

What is unequivocally *not* possible is that someone has actually made a firm bid.

Here is the relevant rule under the Takeover Code:

2.2 WHEN AN ANNOUNCEMENT IS REQUIRED
An announcement is required:
(a) when a firm intention to make an offer is notified to the board of
the offeree company by or on behalf of an offeror, irrespective of the
attitude of the board to the offer;

From here: https://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/11/code.pdf?v=7Nov2019

Once again, all formal bids *must* be disclosed.

djm: Formal bids have to be RNSed under all circumstances. There could conceivably be an informal bidding war, which would *not* have to be disclosed as things stand, but that could change if the Takeover Panel revokes the waiver on Rule 2.4

As I have posted before, I do not believe any interested party would be waiting on the WK DFS before making a bid, as WK is for all intents and purposes immaterial given the current value the market is placing on MT.

My bet is on an update of some kind on or before Monday 4th Jan. Could be wrong, however!

By bidders I mean interested parties. Obviously there have been no formal bids as that would have to have been RNSed.

As I noted before, however, given the share ownership structure, it would be pretty pointless for anyone to make a formal bid if DS indicated he wouldn't support it.

tombi1: There is no formal time limit on an FSP, however the Takeover Panel does have discretion over how it grants waivers to the rules. It could, for example, revoke the current waiver on EUA having to report the identity of any bidders.

djm1: Nothing concrete, other than this is now the longest-running FSP on the market with no update issued. I can't find any other examples ever of an FSP going past 6 months without some sort of update issued. Plus I think the Takeover Panel / regulator will be wary after the suspension/nomad resignation fiasco.

The Takeover Panel will not let it go past 6 months without forcing some sort of update, IMO.

MrYFronts:

1) I don't believe they will be able to move all 370koz to mineable reserves. That would be 100% conversion rate, which never happens. My guess is more like 180-200koz. I could certainly be wrong on this figure I'll admit.

2) Have they consistently demonstrated $400/oz AISC? Until they do I'd be sceptical given the performance at WK so far.

3) I can't actually find the makeup of the PGM basket at WK other than a thing on there website saying the reserves are in Pt equivalent. Pt is obviously trading at less than $1000/oz. Happy to be corrected on this!

4) You cannot take total gross profit over LoM and assign an NPV based on that.

I stick with my assumption absolute balls-out-pants-on-head-maximum £66m post DFS NPV for WK. And realistically it's likely to be far less than that.

Stealthworks: Yes that's pretty much bang on. The whole thing basically comes down to whether or not you believe MT is worth £1bn+. WK is pretty much irrelevant no matter what the DFS says.

We will indeed. At the end of the day, the result of the FSP is what matters and I do not believe that anything at WK is material to that.

1) Current book value (per interims) of everything at WK is c£5m
2) Even if we assume that that is an underestimate (which it may well be even without the DFS) and assign it an NPV of say £10m or hell even the £33m number from the bonkers AFC report, the DFS process is not going to increase the NPV by more than 100%.
3) The market cap of EUA is *one billion pounds*

Actually you're right; I was wrong to say it's *completely* priced in - the SP may well continue to rise in anticipation. I would be willing to bet, however, that the actual news itself will not result in an increase in SP on the day, due to it being already priced in when it arrives.

The actual content is entirely immaterial, as I have pointed out.

The amount of Rhodium currently booked as reserves at WK is so small as to be not mentioned anywhere I can find. The DFS may well double (not unreasonable given usual uplift on DFS) the amount of Pt that can be booked as reserves at WK, but given the present reserve figure is c80koz of Pt at WK, any uplift is completely immatrial in the context of a £1bn mcap.

I don't for one second think that the DFS or indeed WK itself is in any way practically material to the FSP / the valuation of EUA at this stage.
However, there is without doubt an impact on sentiment since people *believe* the WK DFS to be material. This is completely priced in though as everyone is aware it is due, so I wouldn't expect the actual news to have any impact on the share price.

My question on the DFS is simple: Why does it matter? WK, which is valued by the company itself on the interim results balance sheet at c£5m and was only valued at £33m by the absurdly rampy paid-for ACF report, is simply *not material* in the context of a £1bn market cap.