lion will get back to sbl now..., page-11

Hi Mandi - some more thoughts that maybe of interest. The following is an extract from a paper called "Take Over Rules".

ELIMINATING THE MINORITY AFTER A TAKEOVER
The takeover regime incorporates a policy that a small minority of shareholders should not be able to thwart an otherwise successful bid.

Following a takeover bid, a bidder will be permitted to compulsorily acquire securities in the bid class if:

??the bidder and its associates have a relevant interest in at least 90% (by number) of those securities; and

??the bidder and its associates have acquired at least 75% (by number) of those securities bid for under the bid.

A bidder is only entitled to compulsorily acquire shares under this method if it commences the compulsory acquisition process within one month after the close of the takeover bid. (Source: www.ibanet.org "TakeOver Rules")

[Lion Gold closed its offer on 27th March 2012 and at that point in time had acquired 76.22%]

It would appear that compulsory acquisition is now off the table.

If Lion Gold want the rest of the SBL shares then it looks as if they'll have to try to get them some other way. On market purchase? A new takeover offer?

If the latter they will have to pitch it at a price to entice current holders to let go. There are not a lot of sellers at around the current VWAP. It is probable that most if not all of the low hanging fruit have already gone to Lion Gold. So to be successful one would think that any new offer would need to be a lot more generous than the original 1 for 34. The fact that Lion Gold are now $S1.25 helps but not that much. {At $S1.25 it prices SBL at about $A0.028)

A better offer? Dunno but hope so. The downside of that is for the LG Board in that it would annoy the blazes out of LG shareholders who were acceptors of the original takeover offer. Some sort of sweetener like a loyalty bonus perhaps? (More dilution?)

Current buying at the present VWAP in my opinion presents a low downside risk. Could SBL's SP fall further? Maybe and that would accelerate if the manipulators get going or LG pull the plug. My gut feel on the likelihood of either of these happening is low.

So if LG present a new takeover offer to mop up the minority and they do it at the VWAP there is minimum downside exposure as LG will most likely be paying the brokerage. The upside has in my opinion a significantly greater chance. And if nothing happens, which is certainly a possibility, you've acquired some shares in a producing gold company that looks seriously undervalued.