We know our largest investors are Asian giants looking to secure long term supply. Top 10 shareholders hold way above 50% already. SK already has 9.2% of COK. So I cant imagine this is a deal where SK offers $1 a share to the other investors looking to get control and then has to fund production through debt or further equity.
Makes much more sense if its a 1bil share issue at $1. Any share issue above 15% of the issued capital requires shareholder approval, so the significant premium (185% over the last traded price) wins insto support.
This funds COK with its infrastructure needs and fast forwards production. POSCO and KEPCO and the others win because they secure supply. SK win because they have managed to unlock resource value through production. Small shareholders win because we get a producing coal miner. SK will most likely retain exisitng management in order to garner support and show continuity.
Interesting to see how the final details play out, but if it does go ahead then intersting to see at which price we open, especially if this talk of counter offers for control of the company from China (or even other existing shareholders eg POSCO) play into market sentiment.
COK Price at posting:
35.0¢ Sentiment: Buy Disclosure: Held
