LTR (ASX) ASX Today

Originally posted by anatol ↑

Hi @vmp

I don't think LTR's sp is staying back (as I explained by a comparison graph on my last post) because the market is uneducated and can't see the value in LTR. It was true months ago but I don't think so anymore.

Everyone in the large miner companies, in the supply chain companies, funds and instos know very well how good the lithium business is now and how big it's going to be in the future.

They are not so stupid. They can easily see the profits the miners are making atm. It's not a secret anymore. They may not consider the lithium supply/demand deficit is and is going to be even bigger in coming years but the fact is clear atm. There is huge profits in this business, evryone knows that.

If you think that there are trader shorters in the market and they are holding LTR back, then what about CXO! It's shorted 5.30% while LTR is shorted 3.57% atm. But CXO share price is still going up and made all time high just recently.

So why is LTR staying back?
Or who is holding back LTR?

I said on my last post;

"Who is happily losing money and holding LTR from moving up?
The trades in LTR is very suspicious. It's clear that some holds back LTR.Is it the shorters? Or is it a big company (anyone from the lithium supply chain, upstream or downstream) which want to build a big stake in LTR? Or a combination of both? After this much holding back in sp of LTR.

I'm seriously thinking that we might see a takeover offer around $3, which is definitely going to be rejected by our management. I would never sell my shares anything less than $6 at this point".

I believe the shorters in LTR is not here purely to make money by shorting a stock. If someone is happily losing money on a stock that someone should have a goal. I think the aim by shorting LTR is building a large stake in LTR.

I will give you the example of Kidman Resource (KDR) takeover by Wesfarmers (WES).

KDR sp reached to $1.95 in May 2018 then went down to $1.10 in May 2019. The trades was very frustrating during that time, the holders were seeing clearly that their sp was being held by someone. (If anyone here was in KDR at that time, he/she can give better info).

When WES announced its takeover bid for KDR it also announced a Substantial Holder announcement in KDR at the same time with its T/O offer.

WES said it has 17.26% shareholding in KDR. All of a sudden!

8 companies bought in KDR at less than 5% and never had to give subs. holder notice. Then they gave their shares to WES and WES became 17.26% substantial holder. Here is the name of the companies given by WES in that anns;

WES also announced its takeover offer at the same time.

WES was offering $1.90 per share, and saying that it had the support of all board and large holders, and SQM.

Can this be happen to LTR?
No it can't because TG has a blocking stake of over 17%.

However if someone (Say WES as an example ) wants to build a big stake (must be less than 20% as far as I know) and get the control of company from the hands of TG, would try to keep the sp down and would keep building its 400m sharebase. In normal conditions no one would be able to buy that much stock without pushing the sp over $4.

When I look at the companies who would like a large stake in LTR I can see that could be WES in first line.

It has to be an Australian company first of all. Otherwise it'd be hard to get the large stake because the Foreign Investment Review Board would not allow that stake.

Who could be the possible punters; BHP, RIO, FMG and WES.

BHP and RIO would put their bid directly on LTR. They would not try to create puzzles and go around in muddy terrain.

FMG has been very keen on lithium business but not very active anymore as far as I can see.

When it comes WES, we know how WES behaved in KDR takeover. It's clear.

WES has money but not enough to pay over $10b for LTR.
(We know their unsuccesful Lynas takeover offer 3 years ago, then they sold their big stake in Coles and had a lot more cash, then accumulated more cash. I didn't look at WES's balance sheet how much money they have but I think they should have over $5b atm).

WES already in lithium mining in JV with SQM.

WES is already building its lithium hydroxide plant refinery in JV with SQM close to Perth.

WES already has offtake agreements with LG and Tesla (Not clearly saying what happened to these agreements though, keeping them as secret)

I made posts about WES in the past that WES is the most probable company who should buy LTR.

See my Post #:40964719
"I must say here now that Wesfarmers has become my favourite "prospective buyer"

What's next if that is true, and if TG is aware of that,
then we will see $3 sp quickly.

Now your thoughts please...

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Yes @anatol, the masked singer likely to orchestrating an LTR takeover play could indeed be WES, or even another Australian player in MIN? The latter recently announced that they are investigating demerging their lithium interests and retaining a major stake in the spin off. So I wonder if MIN's Australian status might even be of help to another larger overseas player wanting to overcome any FIRB obstacles? Purely conjecture, but the SP is being held & cooked just as KDR's was when I held that gem and management meekly sold out to the first offer, with the blessing of SQM (the overseas JV partner). All is not as it seems I fear, but at least we can be pretty sure that lowly ($3) offers wont be accepted in this case. I'm thinking your $6 figure is pretty good if any offer is made at all, but much rather hang on until production if possible. Thanks for your in depth thoughts!