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15/04/23
13:26
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Originally posted by 2ic
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A very late charge by Min made some of my guesses look a bit foolish, but we were all guessing. Surprised they only started buying 11th April but perhaps we shouldn't be. Got to 20% with an average price 53c tops so hats off to a well-played ambush. Half the shares bought under the radar like 'just some arb fund looking for a late 1c pay-day' before market worked out it was a more determined buyer who then pushed higher to meet their target. Had MIN moved earlier maybe the sellers would have been less likely to let go under 50c, and as soon as a sub-notice was issued the price was going to spike anyway?
Management now look vindicated not foolish in setting ESS up for auction starting with a risky low 50c Scheme. That was always the BODs and our hope, if MIN didn;t arrive and 50c went through fair enough for holders to grizzle about the BOD being surrender monkeys. MIN did arrive, so those posters still bagging the BOD can't have it both ways...
Clearly this isn;t a bidding war or higher offer until it is, much as we like to think so. Buying up to 20% on the 14th was the very latest to vote those shares on the Scheme meeting 20th. ASX has a T+2 days for settlement and register of share purchases (ie 18th), and 18th is the last day shares can be registered and allowed to vote according to the Scheme booklet. No coincidence then. A MIN bid could come as late as the 20th just before the meeting, which being a superior proposal would scupper the vote regardless of who was registered Tues 18th, so I see buying 20% by Fri 14th flags intent to vote more so than intent to make a counter bid next week.
With Odey still holding 5% (I wrongly thought he had sold out) and MIN at 20% those two can scupper this any future vote. Now wondering if Odey's very public sell down at 48c after buying to 52c was a MIN favour... certainly took the wind out of ESS price, demonstrably convincing the market no competing bid was coming (myself included). 70% of the remaining 75% of registry not controlled by MIN still need to vote yes on any revised Tianqi offer, so even if they agree a new TO price with Odey there is no guarantee it will pass a vote. The weakness of a Scheme for Tianqi who has no shares themselves is that 75% is a tough hurdle when MIN now has 20%.
Looks to me like MIN has organised to scupper the vote Thursday and buy time to have some chats with ESS BOD and Tianqi about their plans. MIN may have in mind a counteroffer, just a block and see what happens, or a JV arrangement with ESS. The only thing I see with confidence is MIN want to process Dome Nth ore through Mt Marion rather than duplicate >$300M capex for ESS to go it alone. That substantial value add can be shared with ESS shareholders either through an upfront TO or a JV off-take deal for a DSO operation trucking 90km to Marion instead of shipping it overseas. That outcome de-risks MIN against overpaying on future lithium price uncertainty, while delivering the many ESS holders who want to develop Dome Nth, keep exposure to the lithium price and the exploration upside. Maybe MIN has plans to put Dome Nth together with Manna, Bald Hill down the track?
What has TLEA thinking right now? I expect if they want to keep an involvement, they will do a deal with Odey + maybe others with a tag-along price purchase arrangement at a 60c or higher revised bid to get some skin in the game and minimise MIN's 20% holding strength.
Hoping for a MIN counter offer next week but expecting this to take play out over a longer time frame. Will be interesting to see where the market prices ESS on Monday.
GLTAH
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I doubt MIN would buy just shy of 20% of ESS to sit and hold, or even JV with ESS.
They'll likely buy the whole shebang at a discount price today rather than share the profits.
At least that is what management would prefer, based on their acceptance of 50c.
Looking forward to next week