RE: RE: The End Game >>>I'm sorry, but i disagree.<<<
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Hey, I have no problem with another opinion. I just think one needs to open their perspective and consider a wider range of possibilities.
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>>>>What you are suggesting is that one large (likely institutional) shareholder that has already decided to commit to our cause and turn down the offer, would instead possibly take an illegal deal?<<<
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1. We're not in Kansas anymore Totto! This is the real world and we are dealing with Russians that appear to have questionable ethics. To discount what is possible out of these guys, is imho to under estimate one's opponent.
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2. Please demonstrate to me how "success fees" or a "consulting deal" are illegal activities under Canadian Securities Laws?
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3. I have seen this kind of thing before with the Russians. To be specific, during the CMM.v take-over by Max Finsky's WTG.to there was a shareholder opposition committee. The key to it was the tens of millions of shares held by the former CEO - who had a representative on the shareholder committee. Then at the last minute (last 5 days before the deal closed) the former CEO all of a sudden switched sides and supported the take-over, effectively canceling any hope the Minorities had. Then if one reads the Q-reports on SEDAR filed by WTG it appears as though there was an "extra" 1.5MM of costs which appeared to be "success fees" associated with the the merger.
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>>>>Do you know of ONE shareholder that has roughly 45M shares that would give Nord the majority of minority shares? That is what Nord will require to make this happen in the subsequent amalgation attempt. Nord would likely have to make a deal with multiple shareholders to get that many shares.<<<
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er, NO! One is too narrowly focused, I believe.... right now, per Chris Charlwood's last communique, there are 209MM minority shares outstanding. Shareholder group has commitments of only 84.7MM shares or 40.44%. That means that the shareholder group needs to track down another ~20.MM shares in order to have a "majority of the minority." [i.e. over 50%] NOT 45 MM as you observed.
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But the issue is that this is a creeping process - Mordy has shown he has been patient already, so he can wait the minorities out. The point is that under Canadian Law, if the Nord Gold acquires 90% of all of the outstanding shares they can go to court and force the acquisition of the remaining shares. So the key is for Mordy/Nord to get over the 90% shareownership threshold.
Right now, Nord has lock up agreements with 59.9 Million shares, that brings his total to 690.5MM shares or 82.2% of the outstanding. There are still 65MM shares in play. How many of those shares will go to Nord Gold? Most retail investors don't pay any attention and will just vote the way the company tells them to vote, many are fatigued with this process and just looking for an end. Also, tax loss season is upon us so natural PF rebalancing is going on and this deal provides trapped investors with an out.
So say only 30% of the 65MM undeclared shares accept the deal, that adds 19.5M shares to Nord's tally and brings their total to 710MM or 85%. That means that Nord only has to get an additional 25.2MM shares in the next round of offer. What if Nord gets more than 30% of the undeclared?
So say Nord gets to 85% with this deal and then decides to up the offer? How many are the minorities going to loose if he ups the offer? We are talking about 126MM shares left to be "picked off.". 10-cents costs them $12.6MM, 20-cents 25.2MM, shoot 50-cents is only an additional cost of $63MM - they can borrow that from HRG in the blink of an eye. But the dirty little secret is that at the 85% level, Nord only needs to get an additional 25MM shares in order to get to its 90% threshold.
So this is what Nord will do, they will scout around looking at the big shareholders and figure out who has what price for their Nord shares. Then they will figure out what combination of shareholders and "prices" it will take to do the deal. Say Fund ABC holds 25MM shares and wants 2.50 per share, maybe Nord offers $2 to the market and a success fee of 12.5 MM to the one shareholder?
The point is there are many ways to play this and the cards seem to be in Nord's favor. It is going to end with a backroom deal one way or another. We may not like it but that the likely outcome. This ain't democracy - it's business!
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>>>>On top of all this, why would they have not already done this? They have already completed lock up deals with all the shareholders that have ties to Mordy. The rest of shareholders (retail and institutional) have already shown their cards by not committing to a lock up agreement.<<<
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REALLY??? Lack of evidence of something isn't evidence that it doesn't exist.... We have no way of knowing who is left out there that could be picked off in dribs and drabs.
Just because a Fund has committed to Charlwood means nothing. The Fund might get under internal pressure to make something out of that idle money, or book a loss. They might cut the best deal they can with Nord and flip on the minorities. Look at the the CEO of CMM, this appears to be what happened there!
When all is said and done, this is how one is going to get sc r*wed by this deal - some backroom deal between BIG shareholders and Nord.
I'm just hoping we can squeeze a few more dimes out of the deal before getting forced to take the deal.
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Good luck to us!