GREY:MAAFF - Post by User
Post by
Ethanbrodieon Feb 17, 2011 2:29am
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Post# 18148433
one of the only reason's why i'm still in
one of the only reason's why i'm still inI am not taking away the fact that this management has done a very bad job "managing" this company. If everything is true about the potential of the reserve of potash, and what has happened in the market in the last 6 months, this should be a SCREAMING takeover for someone which concerns me and everyone should be concerned.
Now, I am going to state one possibility of why a deal was not done,
-Sinohydro was a bad fit for the company, and lets be honest the worst time in decades where people wanted to throw in a billion in africa.
They referred them to Complant. I was very optimistic about this one. They did a long DD on their resource and lets remember that the management and board did approve of the deal with magindustries, which "should" confirm the potential of the resource. This deal could have been a case of really bad timing with all that was happening with potash and the politics involved. The other possibility is that they happened to discover their own potash at the same time as the potential deal with mag and decided to develop.
TSC from what I understand in a nutshell, was a wolf in sheep's clothing. They showed amazing interest with everything that was happening prior, got management to accept the warrants if they do a deal or not at 20% of the company(which I think was amazingly stupid on the part of management and should have been caught. This gives TSC a win win situation. They do their DD,realize that mag is in trouble, knows that they would be a good fit, and try and renegotiate the terms to extremely agressive terms on their behalf. If magindustries does not accept (which they did not), so what, tsc still gets 20% of the company at extremely cheap valuation if they strike a deal with someone else.
I actually hope that Complant approached them again, but I don't think that's what they meant when they said one of the parties was already known to the company. If it is Complant, SDIC may have came to a conclusion to move ahead.
So, what this means is that magindustries may have been subject to some "bad luck" and negative circumstances that happened. I don't think they deserve the 3 strike because of the explanation above, but I still think with a better management, this deal would have been done a long time ago.