Post by
ekim on Jul 19, 2018 12:43pm
Accounting 101
At this point it is all about the money.
De Beers deals for Chidliak at $107 million and walks away with a $12 million tax credit for Gahcho Kue. Net spend = $95 million.
Will they get it for that price? Or be forced to match an offer.
Why would anyone bid higher if they think they will just get matched by De Beers and walk away with a waste of time?
Assuming all NDA are now off. Gone. Any entity can go out and buy up the shares of PGD in this huge liquid event.
Then they can go and try and bid for PGD and if that fails, De Beers will pay them profitable money for those shares they just bid on. That is the benefit for a white knight.
Anyone who remembers the other Baffin Island economic deposit and what happend there?
An american came in on the open market and bought a bunch of shares then made a bid for the company. Arcellor mital bid them up and it started a bidding war. The american was the smart money because they could have walked away anytime and taken the cash direct from Arcellor's wallet. In the end, they decided they liked the project so much, they made a JV with Arcellor.
If you think this can't happen here...you are smoking something.
If you think this will happen here...you are smoking something.
It is all pure speculation with no one the wiser on the retail size.
I would love to see the list of names on the buy side of the 22 million shares today.
It will contain arbitragers, speculators, but will it also contain white knight entities?
We will have a few days of huge liquidiation, huge volume before it settles down and then see where the action moves to.
White knights don't need to rush to the table to bid.
Some need board approval (The rio tintos, etc.)
Some don't. (The washington groups, etc.)
The fat lady has not sung.
LONG...PGD
EKIM
Comment by
mill44 on Jul 19, 2018 12:50pm
People who waited until now can wait 2 more months to see the end. At least they save the commission if nothing else. But if this is the outcome, the "invest with the Friedlands" motto is dead.
Comment by
mill44 on Jul 19, 2018 12:51pm
I thought it was always about the money.
Comment by
dabard51 on Jul 19, 2018 1:06pm
Where did you find the C$12MM tax credit in this deal, related to Gahcho Kue?
Comment by
mill44 on Jul 19, 2018 1:12pm
The tax credit comes with the company. It will not be in the deal. The 4 years of investment and the tax credit sure makes DeBeers look like the smart ones. They basically get the 100% for what they were willing to pay for 50.
Comment by
mill44 on Jul 19, 2018 1:58pm
Put all together, they basically gifted the company away, unless we are missing something. Maybe after the closing DeBeers will announce the appointment of a new CEO. Or this is a way for Eric to make sure his ex gets nothing.