RE:RE:RE:RE:if takeover let's guess the price?mining_pays_my_bills wrote: True, book value is not always reflective of a take-out price, but it is a good guide. It's a way of benchmarking a company's worth, and you start negotiating from there. The biggest factor in taking over a publicly owned company is shareholder approval. More than 50% of the Shareholders have to be OK with the offer. Right now, at these levels no one is in the green. There was a huge crash in SP after the gas price announcement. It was already at all time lows then, all shareholders were in the red, and then BOOM another 50% drop. Now we are all, with the exception of maybe 1 million shares, in the red. Shareholders won't accept a price at which they are losing money. Not at this point. Maybe if the price languished here for 1 year or two, and people got fed up and juts wanted to recover something, anything, then they'd accept 50 cents. But right now, with all shareholders having freshly lost 90% of their investment, they are hungry to re-coup losses. I doubt an offer of even 1$ would get a 50% shareholder approval. My guess is if there's an offer it would be in the 1.50$ - 2$ range. However I'd rather see NKO sell assets, and keep restructuring so as to become profitable again.
Mining just so you know the company would need two thirds of the vote not 50%, secondly all shareholders have not freshly lost 90% of their investment, over the last two months (gas price announcement) the stock has been in the 30's and 20's cent range and there have been over 40 million shares exchanged during this time not the mere 1 million that you seem to think. I for one am not in the red (break even at today's closing price) and if the offer is $1 I would gladly take a near quadruple up and I can assure you I'm not alone, heck even if the offer was 50 cents I'd seriously consider it depending on how long it took to get that offer (as in if after 6 months they announce a 50 cent offer I would be inclined to think that there isn't much interest for Niko out there and would likely just take the profit and be happy. It was a nice pump speech tho but innaccurate nonetheless.
Obviously I'd love to see a $2 offer in a month or so, but the reality is that Niko has a complicated balance sheet they have a ridiculous loan in place with an even more ridiculous clause (the loan can't be bought out until Dec 2015 on top of the high interest rate they have to pay a 5% royalty to them for the next 7 years if I remember correctly), so whoever is interested in Niko would first have to negotiate with the lenders and get them to lift the clause. On top of that they still have a lot of drilling and exploring obligations which they haven't been able to work around, as well as providing their share of the Capex for India (so MJ-3 being successful would actually effect them negatively right now because they would probably need a couple hundred million atleast for their share of the development costs). Not to mention the fact that they may not even qualify for the deep water premium because originally the GOI said it was only applicable to new unexplored areas not existing ones that just haven't been developed yet hopefully they'll clarify this in January sometime.