Arbitrage time? / Core Gold announces 2nd bidderINK declared arbitrage interest a long time ago, but back then there was only Titan, so nothing to arbitrage to, especially since Titan is halted. But with a 2nd bidder that has to go over the top of Titan, now there is some reason to believe in 55 cents or 65 cents or whatever.
Core Gold's announcement finally shed at least a tiny light on the Strategic Process - it's official that there is a 2nd bidder. And that bidder won't get anywhere unless it's at a premium to Titan's claim. A bid value of more than 52.4 cents, and/or cash and real-worth shares, would decide the matter. So if the lowest possible value of a 2nd bid is 55 of 65 cents, why would anybody sell now in the 20's?
The exact nature of the lock-ups are TBD. On the Titan side there are a million "outs" - ultimately they are allowed to amend their entire offer anytime they want. On the side of those pledging to Titan, they will have "outs" too, not only if Titan doesn't get to a real 50%, but also if there is a quality bid from the 2nd bidder. And a host of other reasons as well. So the pledges are not a lock.
It appears that Titan HAD TO declare their "sweetened" 3.1-share bid today - it was the very last day that shareholders in either company would have 30 calendar days before the tendering deadline Jan 7 - it was probably Titan's last chance to make a change in the share ratio etc. So that's why they would declare publicly, even when their lock-down shares are only 40%, and even those could be flipped under decent bid conditions.
Today's trading of about 2.4 million shares was just about the amount that Titan, with Core Gold's effusive help, declared they needed for the weakest version of 50% of Core Shares. The selling was, I think, mostly PI Financial to Anonymous. Yes, that PI Financial, the same one recommending a "fair deal". All rather incestuous.
So it was helpful to hear officially from Core that another bidder is being negotiated with, and at a late stage in negotiations. Putting the pieces together, the scene is being set for actual arbitrage. Those under lock-down, we are advised, can't vote on whatever the 2nd bidder puts in - that's a conflict. If a superior bid is made, it and the board's response had better see the light of day. If it's at all decent, it had better be made available to shareholders with board support. Then arbitrage should take Core right up to more like fair value.