Sold Down the River by S Bharti This offer is utterly rediculous and is a disgrace to CRK management and directors.
At last report, CRK had $62.5 million in cash and resrtricted cash (
.20 per share ), no LT debt and a written down book value of
.76 per share.
This included our gold reserves and resources, at cost value @1000 POG and two mills with a replacement value of $200 million.
The net bid for Luxor is just $120 million or less than the value of our two mills, so Luxor is getting 6 million oz of gold free.
Now, here is the interesting part.( see circular )
On September 20, 2011, Michael Conboy, the Director of Research of the Luxor Group, approached Stan Bharti, the Executive Chairman of Crocodile Gold, regarding the privatization of Crocodile Gold, but no further discussions occurred.
CRK on that date was trading at
.68 and the average 15 day was just above that.
In order to privatize, Luxor would have to pay a premium to that value and 25 % would certainly be a minimum premium.
In other words, Luxor would have had to pay about
.85 per share to privatize CRK at that time.
In his brilliance, Stan did not pursue this offer.
Check how the share prices slid gracefully downwards following Stans rejection of the initial offer.
Manipulation by Luxor and perhaps knowingly by Bharti ?
And. now he is recommending we accept
.62 per share.
This is the material for a class action suit against Stan Bharti and we should have many other shareholders who want in on this class action suit.
Further, this was a non-arms length offer ( Luxor is a defined insider ) and certain constraints must be followed to protect ordiuanry shareholders.
Further, we still have the poison pill which may be triggered by ordinary shareholders under certain conditions.
In short, do not tender your shares............we are being royally screwed.