Yes. You’re perfectly correct 90% of the vote is a successful unconditional take over.
That means all shares, even those who voted no to the take over are then taken by the new owners.
Prior to that - the take over is conditional. Higher bids may be required. New bidders can enter.
The take over period can be extended over quite a long period of time too. It can get drawn out and very painful if the company resisting clearly has the numbers to say no.
It is possible to have a take over at a lower percentage voted figure.
That is the less preferable conditional take over.
This happens around the 80% mark. I’m going from memory on all this cos its more fun that way
so double check any of this if its really crucial.
I also remember just recently reading that this is theoretically possible at 75%.
Anyway that take over is not as friendly.
At 80% the usurping company controls enough to win any share holder vote, since there is no longer a 20% vote blocking bloc available to vote down a motion against the usurpers.
ie Delete the board. Gone. Shut down and sell everything etc.
They can theoretically vote to do anything they like with the company now
but the real kicker for pushing the vote through is the old “we’re going to de-list this company if you don’t immediately vote for take over” trick.
There is a bunch of rules about this. How long it takes to happen. Last chance to sell shares etc.
Its not immediate but it can and does happen this way and some times on purpose,
because removal from public listing is the actual intention of the new owners.
The company is then de-listed and those that have not sold their shares by then can theoretically be caught with unmarketable shares, shares that no longer have any buyer.
Technically this is referred to as Up Sheet Creek.
The gentle reminder of this possibility or threat of this action is normally enough to push an 80-ish% vote over the line to the required 90% reasonably quickly.
I just remember this stuff cos GMM got taken over by GXY a couple of years ago.
Its not all its cracked up to be.
Always watch for arbitrage possibilities during the process.
I didn’t play it perfectly but there was an interesting period because the 2 companies share prices were tied together by a valuation ratio that ended up like 2 cars having a fundamental value car-chase. It was a bit crazy as they tried to stay in sync.
Specific take over deals may outline different conditions, may or may not be recommended by the board etc.
I’m not posting because I want a take over. Far from it.
I’d much prefer a few bucks on the sp by natural growth in line with the spectacular resources and within a relatively short period of time too thanks very much - as clients and off takes emerge, global nickel reserves dwindle to nothing by the end of the year forcing an explosive nickel run, and a little gold spin-off thrown in for an added bonus.
I’d love to see the spin-off done at 1:1 and additional drilling capital raised by offering the shares to holders first.
That’d be sweet.
Perhaps 150m x 20c shares. 100m for ARL holders (1:1) and 50m shares for raising drilling and corporate capital.
Plenty of valuation head room by starting at a $30m market cap and some good drilling results behind it, progressing to jorc etc.
Only question I have is - why would the company do it?
I'd love it to happen - and still feel it will - but its really just a Xmas gift to holders.
ARL has the cash - but with big capex to pay it may not be the biggest priority this year.
Somehow I still think that Painter will run his own spun-off gold company very soon. It has been perfectly sign-posted by his new position.
