I think you’re on the money ImpatientOne. I’m an SBL shareholder...

I think you’re on the money ImpatientOne. I’m an SBL shareholder and have no interest in CGT other than for the Lion Gold connection.

LG benefited from a shortfall in a planned SBL Capital Raising in March 2011. Six months later LG (or their affiliate Infiniti Premium) basically supplied the shortfall funds and got their foot in the door when issued shares. The rest is history.

Your board issued shares so that LG or associates can vote as required in conjunction with any management stakes to get whatever approvals are needed. This tactic might also come with 1 or 2 board positions attached to it in the near future.

A key difference is that LG wanted 100% of SBL and it was not subject to any minimum acceptance conditions. Whereas with CGT they’ll need to get 50.1% minimum acceptances for the offer to succeed, even though they want 100%.

For now they will endeavour to cap the SP for as long as they can and only buy on market when forced to. Chances are they may use an affiliate like Weiss Asset Management (US based fund that swallowed up a lot of SBL on market before flipping it all over to Lion Gold for shares).

If you read over the announcements from SBL from Sept 30, 2011 I think you’d learn an awful lot. From memory you’ll have 6-8 weeks before you receive a Bidder’s Statement from LG and another week or two after that CGT will issue a Target Statement so there’s time to get your head around what’s likely to happen.

I’d say LG did SBL slowly. They used lots of tricks (all legit) and also time delays and waited for weak hands and traders to bail and then Weiss mopped them up on market. Along the way other shareholders accepted the LG scrip offer.

I’d say part of yesterday’s SP surge was due to traders and those with a short term horizion for arbitrage but it could be a long process drawn out over 3-4 months. In the absence of another bidder expect the SP to weaken in the interim, given you’re 2 months away from a formal offer being made. However, Alex was right towards the end of the SBL offer period the price did run up strongly but it was suppressed for along time leading up to then.

Also if they get over 50.1% they may be able to extend the offer or revise the offer, so keep an eye on all Substantial shareholder Notices as the weeks unfold.

glta.


Also this was in the Age today …
http://www.theage.com.au/business/liongolds-eureka-moment-20120416-1x3pq.html?skin=text-only