I find the current volume perplexing to say the least.
Since the TO offer an average of 8.150 million shares traded per day aggregating to just under 220million shares traded or just under 20% of the share capital. Even if Zhaojin bought all those shares (they hold 27%). Lets say Chifeng and Kongwell Management are turncoats and throw their lot in with Zhaojin then add 19% taking the TO to 46%.
Its clear this TO is doomed for failure. I suspect most of the volume since 30 Oct, has been absorbed by Chifeng and Kongwell Management which would limit their combined holding to 38%.
Surprisingly the remainder of the top 20 and the retail holders are going to have a big say in what premium someone offers as an alternative TO offer.
Chinese companies are state owned (either directly or indirectly), and the PRC bureaucracy churns very slowly. I feel after the expiry of this offer we shall see a bit of SP instability. Does Zhaojin chuck a tantrum and hit sell?
The key moving forward is going to be monthly production results and the POG.
TIE Price at posting:
62.3¢ Sentiment: Buy Disclosure: Held
