RE:RE:OREA - Time for Shareholder Composure TDSB, thanks for the reply. I understand what you suggest and have to admit that I have experienced that ‘feeling’ on a good number of occasions over the decades; particularly, with more speculative stocks.
However, I would suggest that a potential buyout situation is somewhat different to the more usual trading of a stock that does not look forward to such a probable ending. I threw in the word ‘composure’ in my earlier post because the bottom line is that with a buyout the holding shareholder at the culmination is automatically ‘forced out’, but invariably at the highest priced bid.
Take e.g., the Cardinal Res’ situation this year. Going on memory (never good for me) so my numbers may be off, but those presented illuminate my point. Bids started in the 0.40s and ended around 1.05. In fact, Cardinal Res’ management left a newly arrived bid round 1.15 ‘on the table’ for several reasons. However, shareholders who held (composure) were finally forced out by a management decision, yet, were rewarded at the top.
Now I believe that both NG and Shandong told early sellers (while trying to gather a controlling number of shares) that if they sold and the bids went higher, early sellers would still be compensated for the difference they left on the table.
But not all bidding companies offer such seller friendly moves. If NG has no competing bidder for OREA it is possible that early sellers will not have this offer made to them. Further, NG may hold on any move to up the ante by offering to fund a spinoff company containing assets I doubt NG will have any interest in - Maripa and Suriname (should hear by mid Oct or before re., finalizing this potential new Suriname project) to OREA shareholders. It is unlikely that those selling early would also get the spinoff shares porposed in any later bid(s) as well.
Further, it is quite possible that even with no other bidders (for all the reasons I have stated in earlier posts) that OREA fights off any NG low ball offers. Again, major shareholders IAG, EDE, Sandstorm, US Investment Fund and OREA management are, IMHO, unlikely to accept any low offers after all these years, while also knowing the Montagne’s real value. How many of our present traders have really done a deep dive into the 2017 BFS value and contrasted a guesstimate of todays value related to sp and any potential premium offers?
So, NG either keeps going up and up with their offers until they can gather that controlling shareholding, or they stop till a later date. The more OREA shareholders ‘hold’ the higher NG goes or they stop. Should such a stalemate occur we would now have a new sp ‘valuation’ for OREA created by NG's bidding interest. This, IMO, will only be multiplied further by the incoming Montagne d'Or catalyst’s for 2021-22. Plus it is quite possible those holding wil also get a nice spinoff surprise (to increase asset value re., both company's sp).
Now, if a NG bid is deferred, then for traders the sp remains in play as it progresses over the next 12 months or so. However, for shareholders the big question becomes do you unload after the reports/apps are submitted and at a point where you sense the permit award is coming, or do you hold? Most believe that Montagne d’Or will be granted, but if the sp is where I think it is going to be by mid-2022 then I may well be looking to unload a % of my holding. Some have talked about a bird in the hand… A permit rejection would be a disaster for OREA (hence the early spinoff to try and avoid crushing all OREA assets).
Hope this helps re., my thinking on any NG future bid and beyond.
GLTA -
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