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08:35
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Originally posted by m0ngy
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I've been researching IMC in depth. As we know they are a company buying big stakes cheaply in companies with good assets but suffering a debt crisis. I particularly have in mind the gold miner MOY and of course HZN. Whatever their intentions down the track their model of buying big stakes in companies that crash them through the normal TO thresholds depends on target companies believing that they will not be subjected to an unconventional TO. For example if they had crept 3% more on MOY, to 50% would our management have done a deal with them? Nothing our management do surprises me these days but even they would surely have been very reluctant. They do have some expertise here, Board Chairman John Humprey is Dean of a law school and a former member of the TO Panel. I note that IMC have been subjected to some poor corporate behaviour allegations over the years and have taken care to defend themselves which supports the case that their model depends on them being seen as reasonable corporate citizens. Now it could be the case that at some point when they have large stakes in a number of companies they will move to TO them all but my reading is that, for the time being, they are more interested in continuing the unconventional stake building by targeting distressed companies as opposed to seizing control. They can't have their cake and eat it too and it seems likely that they are currently focussed on building stakes and control to protect their stakes rather than acquiring companies.
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I think the key is to understand what management do after the yes vote. How will they cut corporate costs and reposition our valuable assets in the market. Imc have a part to play in this. A burgeoning cash balance will do wonders for shareholder value and position our assets favourably as going concern.
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