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It seems the next news here we are expecting is on funding. 3 weeks ago DC said we could expect an update on this 'very soon' or something to that effect. As we have come to learn, SOLG's use of words like 'soon' and 'imminent' do not always tally with how they are used by the rest of the English speaking world!
So if CGP own 157.1m SOLG shares, that they are planning to place with an investor, or investors, and then loan the proceeds back to SOLG to keep the lights on, how are they pitching these shares?
It is very clear that CGP top brass are expecting this company to be sold, and I guess within a reasonable timeframe - let's say 6 to 12 month from the date the merger was announced (but that is a guess). Using SOLG's own presentation as a guide, the base case for a takeover is 78p based upon the value of Cascabel alone. So the pitch - I imagine - goes something like this: you buy our 157.1m shares from us for Xp and within 6-12 months we strongly expect them to be worth at a minimum, 78p. What are the rules on them stating or hinting that Mather has a buyer for their shares lined up, subject to the merger completing? Would this be legal?
As an investor I would be asking: 1) What happens if no one makes an offer for SOLG, would I then be forced to stump up more cash to maintain my 6.84% of the company? 2) Why has no one tried to buy the company outright already?
I would also like to know, prior to news of the merger completing, would it be possible for SOLG to announce news of an agreed bid, subject to the merger completing? For example, would it be feasible for us to release an RNS stating that BHP and SOLG have come to an agreement of 78p/share that will be put to a shareholder vote, and that the offer is conditional on shareholders voting it through and the merger completing?
Apols in advance if some of these are silly questions. It feels like there are a few ways in which this could play out and just trying to get my head around it all, particularly before putting anymore cash in here at these bargain prices.
Thanks, SM
I can't see why gthe last part wouldn't be possible SM provided it was before the CGP vote.
But in the menatime, I am expecting that there will have been more than just Mitsui interested in the 6.7% which, as you implied, sorts out our liquidity for at least another 6/8 months IMO...
Surely we won't have to wait another week for the share sale to be completed...and why not at 25p...or more...?
Thanks red. I had heard rumours a couple of months back that this year's AGM had been slated for November. It's possible that it was pushed back due to the merger, or because of delays to the Porvenir PEA and PFS addendum, but there's always the chance they are buying time as they are deep in negotiations to sell the business, if we can do so prior to merger formally completing.
I think it's more a process of timings and how the votes play out at the AGM. For instance, if they get the 20% voting power added post CGP merger, then I think most expect SOLG to be able to revise/ propose new resolutions that will empower them or allow them to circumnavigate the handcuffs placed upon them at the last AGM. So that's your funding issue resolved straight away via new resolutions at AGM and powers to raise cash while diluting the main large shareholders. However, should timings slip or they struggle to secure votes at AGM for various resolutions, then I suspect they will by default place the 6.7% SOLG shares that CGP previously held or got absorbed into one entity post merger.
It's pretty to me that the new resolutions that will be put to shareholders at the AGM is a clear indication of how SOLG see's the next 6months to 12 months. Once resolutions have been released ahead AGM, BHP and NCM can then commence their smear campaign or toys out of pram antics. But first... we await the AGM resolutions... it's all about gaining back the power they lost via last years AGM.
I think someone posted an update on when the resolutions would be made public and it was 17th November?? And AGM on Dec 22nd.
The silence is there for reason.... the big reveal needs to be coordinated in a smart way so they basically leave BHP and NCM with very little time to react.
SM, yes, it's perfectly possible, but unlikely.
Before spending a lot of cash, my guess is that a bidder would want absolute certainty the merger was a done deal.
I think the first step will be the announcement from CGP that it has sold the shares, followed shortly thereafter by a holdings announcement from us. The mystery for me is why CGP hasn't yet placed our shares.
It seems odd that this rather clever scheme to raise some cash wasn't already agreed prior to the merger announcement. Both parties have placed a great deal of faith in this and failure to deliver would be terminal for our team.
Morning Add
Agreed it wouldn’t be good, but highly unlikely in my opinion….. Irwin the maths guy and Sangha M&A specialist are very unlikely to have agreed to any of this without certain assurances…. Not long now and we’ll know
Agree news very close
DBW, re Sangha and Irwin I agree completely. As we know, they've agreed not to trade the shares (why would they?) but I'm guessing they've also been made insiders.
The AGM notification is looming and surely we can expect a raft of announcements beforehand?
Hubris, your question about why they would sell at one price i.e a lower one, if they know a bid is on the table at a higher price has been puzzling me since the deal was announced.
The only explanation I can think of is that it's being done as a sweetner. However, even then such an arrangement exposes their board to allegations of fiscal impropriety. I suppose their argument would be that they had to sell at the lower price to ensure a deal of much higher value could be concluded.
Whatever the situation, one thing's for sure, this has a good deal of complexity and there are many twists and turns to which we have not been made privy.
HH - glad to see you're behaving yourself Slug. Long may it last and congrats on slipping under the radar.....quite clever really.
Z
Thanks all, helpful. Nice rise today, too.
Ignlore him or filter him HH...
Keep up the good work. You're a breath of fresh air...informed opinion and credibility.
Zoros Hubrishunter is not Slug.
Slug is winding you up on advfn.
For starters HH is articulate checks his facts and is knowledgeable.
Slug can never be any of these things because he is Slug.
It is impossible for Slug to be anybody else apart from Slug..
That is why he is so identifiable when Slug uses another alias, because he is so unintelligent.
Also I see DBW is continuing to take snide shots at me.
Typical Slug acolyte.
HH - I'll be the first to apologise if it turns out you are not slug.
So far your posts have been very useful.
Long may it last
Z
Zoros, this board has been so scatta recently it wouldnot surprise me if I discovered that I was slug
HH...ignore him or filter him...
zoros and Slug are slugging it out on ADVFN...disruptors...
Looks like someones buying chunks of SAVE HH...