This from The Age. http://www.theage.com.au/business/regent-set-to-dent-bc-iron-success-20121219-2bmgg.html
Regent set to dent BC Iron success December 19, 2012 - 1:19PM Peter Ker Resources reporter
One day after hitting the highest share price in its six-year history, BC Iron has been rocked by confirmation that its second-biggest shareholder has begun the process of selling down its 20 per cent stake.
Hong Kong-based investor Regent Pacific revealed overnight that it would soon ask its shareholders for permission to sell its $82 million stake in BC Iron.
While there is no guarantee the shares will be sold, Regent Pacific shareholders will vote at a meeting in late January to give the company a "mandate" to start disposing of its BC Iron shares.
Shares in BC Iron started sliding on Wednesday on the back of the news, and were 8¢ lower at $3.34 shortly after midday. Advertisement
On Tuesday the stock hit a record high of $3.42.
Just 18 months ago Regent unsuccessfully tried to takeover BC Iron but was thwarted by BC Iron's other major shareholder: Consolidated Minerals.
Regent chose not to participate in a share purchase plan announced by BC Iron earlier in December, and its plans to exit the stock have now accelerated further.
In a statement to the Hong Kong stock exchange, Regent said now was the right time to exit the stock given its strong value on the back of a good year and a recent deal with Fortescue Metals Group that will see revenues rise even higher in 2013.
"Subsequent to the exercise, in full, of the Disposal Mandate, the Company will cease to hold any BCI Shares," Regent said in a statement.
Regent stressed it had not started the process of finding a buyer for its shares.
"The company is not currently engaged in any discussion with any party to dispose of its holding in BCI and neither does the company have any current intention to dispose of its BCI shares within any particular timeframe," Regent said.
"Whether and when the company will embark on such future disposal or disposals will depend on a number of factors, including the prevailing market prices and conditions at the relevant time or times."
As a result of the announcement, Regent's Jamie Gibson has today resigned from the BC Iron board.
The news ends a remarkable winning streak for BC Iron, which has thrived during an otherwise turbulent year for iron ore stocks.
BC Iron was set to be the only iron ore pure-play to finish 2012 with a share price higher than it started the year, until Fortescue shares started an amazing spurt on December 5.
Even allowing for Fortescue's recent rise, BC Iron has dramatically outperformed the rest of the sector in 2012, after hitting all of its targets, surprising the market with a bigger than expected dividend, and doing a value accretive deal with Fortescue to secure more iron ore exports in coming years.
BC Iron today stressed that Regent may yet choose not to sell its shares.
“I would like to acknowledge the considerable support Regent Pacific has provided to BC Iron over the years having taking its initial holding in the company some years ago. I would also like to particularly thank Jamie for his effective contribution to the board,” said BC Iron chairman Tony Kiernan.
BC Iron's core business is to export iron ore under a joint venture agreement that allows the company to use the infrastructure and marketing expertise of its bigger neighbour, Fortescue.
For the record, Peter, the record high was not $3.42 on 18 December. It was $3.50 on 20 August.
Plus, what does this mean "and its plans to exit the stock have now accelerated further". Along with this "Regent stressed it had not started the process of finding a buyer for its shares". How can they have accelerated when they haven't even started the process?
Anyway, I don't think Mr. Ker's comments will make me reconsider sending off my cheque for $15000.
My hope is that Regent spreads the shares around. More shareholders = more liquidity.
BCI Price at posting:
$3.30 Sentiment: Buy Disclosure: Held
(20min delay)