You never know what is going on behind the scenes with these Chinese companies, and you never will.
The transfer price is half the current share price, which smells of something strategic, or dodgy, either way it now looks like moves are being made and things will quicken.
At 13% Chifeng have positioned themselves to stop anyone else being able to get a compulsory acquisition level of 90%, which gives them time to do more wheeling and dealing.
Caigen owns a lot of shares, so he also has the ability to stop anyone getting to the compulsory acquisition level.
Chifeng and Zaojin may create (or already have) a combined subsidiary company from which a bid will come, though my bet is that Chifeng will get Zaojin's shares via a similar route to what has taken place here today, with a behind the scenes deal at half price in return for other business transactions that we will never know anything about.
Watch the share price closely now, for manipulation to the downside.
I believe shareholders will only accept a cash offer, rather than Chifeng shares on a Hong Kong exchange.
There will be a very good reason why they have left it this late, in comparison to a takeover like Cardinal Resources had at about the $300m market cap.
They'll lob a low ball bid first, almost definitely, maybe to gauge how many shareholders they can attract, and to flush them out.
Chifeng will know that they only (effectively) need to pick up 50.1% of the shares to then take control of the company, and this in fact may be their target.
If they can negotiate for the Zaojin shares (at half price, behind the scenes), and then get just 30% of other shares to be sold at $1.10 then they are home, and take control.
What sometimes happens when they take control, having gained 50.1%, is they announce an intention to remove the company from the ASX, and say that shareholders who don't accept their current offer of $1.10 may then find themselves stranded and unable to sell their stock easily, which is when all the frightened folks also capitulate and accept the offer. It's called business, but really it is a quasi form of blackmail.
How many of us have seen all these strategies repeated over the long years - many, many times.
Like Sherlock Holmes said to Dr Watson .... "the game is afoot".
Gw
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