If we assume that Wah Nam already have 75% of BRM in the bag it means they need to acquire a further 20M shares to turn their dreams into reality. Ignoring the sweetheart deal with the Directors, they have offered minority shareholders a paltry $30M in cash to sew BRM up.
I’m ignoring the WNI scrip because – let's face it – it's worthless.
In offering just $30M to buy up the rest of BRM, Wah Nam are disaffecting scores of shareholders who until the day they die will pour scorn and derision upon BRM/ Wah Nam and everyone else complicit in this deal – including the suppliers, contractors and so called “professional firms” that have made it happen. In fact Wah Nam is spending almost $3M on their “advisors” and agencies to make the takeover happen.
If Wah Nam was to pay out the residual holders a more acceptable $5 a share it would cost them just $70M more to achieve the same outcome.
Let’s put this into context. BRM will cost Wah Nam at least $2 billion dollars to develop. Acquiring the rest of BRM for $30M in cash is in effect a miniscule 1.5% premium to the capital cost. So for just an extra 3.5% they could likely buy out the residual holders at $5.
My question to Wah Nam is : Why would you leave such a sour taste with loyal shareholders and make it harder for yourselves to ever negotiate a deal in Pilbara again to save in effect 3.5%??
.. or are they smarter than that?
BRM Price at posting:
$2.30 Sentiment: Hold Disclosure: Held
