Divesting 20-49% for downstream chemical facilities?, page-144

Hi BuyHi - I agree with you that many posters are drawing unrealistic conclusions about price in comparing the Pilgangoors sell down to Wodgina. However, I disagree that an industry player could pick PLS up easily. My logic ...

- The PLS share register looks wide open with mainly retail holders, however GLF owns 8.37% and MIN about 7.5% (was 8.3% before the GLF dilution).
- Together these Li players could block a third party now and individually they could easily grab the approx 2% extra needed to indivually block any hostile takeover (only 10% needed)
- A scheme of arrangement would effectively require the PLS board to agree to the takeover ... but not beyond possibility of MIN and GFL working together to block that too (have approx 16%, would need 25%)
- Also, PLS has so many arrangements with other Li industry players that there could be competition objections/obstacles.
- However, it is perhaps feasible that MIN and GFL could bid together to take PLS and form a 50:50 JV. However, as I’ve said before ... Chris Ellison has form in buying assets very cheaply and so I’m not suggesting this is likely (or what shareholders would want).

With all stage 1 and 2 volume sold why would a partner want that part of the company anyway? They’d be paying cash for no supply? By selling all stage 1 and 2 volume, I think KB has effectively blocked any downstream partner from wanting the whole of PLS.