Tambourah Metals Ltd T.TMB.W

Pre-transaction share price movement

[Alphaseeker1984]

I have been wondering for a long time why Tembec's stock was not moving higher after the Q1 results were release at the end of January.   All signs pointed to continued momentum for the company's business plan.   Jim & Mitch were excited on the conference call about the future.  They spoke openly about SC's continued margin expansion (indicating they thought the next few years would see pricing power in the hands of the producers).  They also talked about lumber lining up for a few great years ahead.  The results released in early May continued that confirmation.

For the life of me I could not understand why ever time we saw significant buying the stock would sell off.  As I have noted in a prior email that a large portion of the public float changed hands.   From January 1 until May 24 (the day before the transaction) almost 12 million shares changed hands.  That represents 35% of the available float.   It is pretty surprising that the stock stayed at 3$ all throught that.   RYAM and TMB are saying the offer is fair value and one reason they are giving is the significant premium being paid above the average closing price of the stock.    So I am now wondering what kind of help RYAM was getting (if any) in keeping a lid on TMB's price so they could make the argument that a significant premium is being paid.   We have all crunched the numbers over the last few months leading up to the takeover bid and it is clear that TMB was worth more than what it was trading at given its current and future performance and compared to the industry multiples.   RBC and TD were also adjusting their forcasts higher.   So were the debt agencies.    Then all of a sudden the offer at $4.05 per share.  I think the game was being rigged to make the premium argument and now Oaktree and Steelhead (thanks guys) have taken up the argument.    It will be interesting to see if RYAM does not up the bid if Oaktree and SH decide to insist on an investigation into stock price manipulation.  I would not be surprised to see an invisible hand was helping suppress the stock price while RYAM was dealing the transaction with TMB.