another hunan valin scenario - full take over, page-7

Just speak out loud for another possible scenario, IMHO only.

HV is collecting as much cheap shares as possible (cheap = 44c that HL has paid for and was considered by most as so cheap at that time). However HV can't buy as much as it can without pushing the SP too high to their desire. They can collect cheap shares from those who are prepared to sell under, say 45c.

HV may want to stay under radar and when they (and their nominee) accumulate enough to be just under 5% (so they do not yet become a substantial holder). Hanlong then co-ordinatively withdraws their T/O bid by just only pays SDL about $10mil penalty. For the same reasons as to why other big I/O players do not join the T/O game, there will be no other offer at this stage (eg. Hanlong still holds 20% of SDL, no convention, Chinese have Cameroon/Congo in their bag, etc..).

Without another offer, Hanlong's withdrawal should substantially pushes the SP down, at least for a very short term. HV then buys quickly without worrying about their holding status (they have few days to declare them being a substantial holder). There wouldn't be a problem of accumulating an extra 100 mil of shares (or 10%) in this period as we have all witnessed large trading volumes - in the order of 100mil after a significant announcement.

HV then shows their hands by a T/O bid with a small sweetener (eg 60c). At that time HV should already have a substantial holding of SDL. Hanlong will not oppose as they will make a substantial profit by accepting 60c offer (36% of $200mils = $72 mils) and go back to their speciality - CFD trading.

FIRB would have very little reasons to decline the T/O. Most of shareholders including Hanlong are happy and the shareholder would go through.....Of course, there is always a chance that another bidder joining after the convention.

I am a long termer having bought SDL during GFC, held through the crash crisis, accumulated a bit more at 27c, and 37c. I was staring at my laptop on 04/01/2010 witnessing the SP reaching its peak at 62c. Accumulating a fair bit more at the end of January 2010 at 47c (yes I stick with SP ending with '7'), then holding on until now.

I hold the same sentiment with the most long term holder - the SP is far cheaper than resources SDL has, but what can we do. I was a firm believer of the J/V story even after Hanlong's initial 50c bid. My heart was shattered by GJ's admission that 57c offer is the best that we can get. Sigh... But I will hold on until the end.