For Exxaro to make a bid for JMS to gain full control of Tshipi, they will first need to wait for the decisions by Glencore and S32/Anglo as to whether they will either pre-empt or, in the case of Glencore, force Exxaro to buy their stake in Mokala. Those decisions wihich will need to be made by around 30 June this year (ie around 30 days and 30 business days as mentioned in the Exxaro Q&A) will significantly impact Exxaro's cash reserves and hence their ability to further consolidate Tshipi by making a bid for JMS.
As Jupiter shareholders we should welcome the pre-emption for both of the other assets as it would reinforce the view that manganese assets are undervalued in terms of future demand/supply outlook and that Exxaro would then be keen to get full control of the only manganse asset they will have acquiried, also having the extra cash they are not spending on Mokala and Hotazel.
One would expect that the respective advisors of Exxaro and JMS will have started the dance to position each company to move forward by the time the pre-emption decisions and approvals are received. In my mind there is no doubt that ultimately Exxaro will make a bid for JMS and, unless there is another party to come in between them to bid up the price, it will have to be around the 30-35 cents mark.
Let's hope that JMS management and Board do nothing silly to safeguard their jobs and deal with this in the best interest of shareholders.
JMS Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)