stock split?, page-12

RedNinja

You might be right although KAH and EXT proposed a merger in 2008 then terminated it as a result of major shareholder concerns regarding the "potential for Rio to acquire effective control of the merged company".

Itochu and APAC were not on the registers then and could possibly counter RIO now but they may not be any more receptive to a merger unless they were absolutely sure of restricting RIO's potential control.

KAH RNS on 19/11/2008 explains all:

"On 11 September 2008, Kalahari announced that Rio Tinto ('Rio") had acquired a 14.9% interest in Kalahari and a shareholding of 10.9% in Extract (Rio has subsequently increased its shareholding in Extract to 13.1%). Rio acquired its shares in both Kalahari and Extract from RAB Capital, which had been put under unforseen financial pressure caused by the global financial crisis. This was unfortunate as RAB had been a major supporter of Kalahari (as well as Extract) pre and post its float on AIM, fully participating in the Company's last capital raising in March 2008.

After the Restructure, Rio would have held approximately 19.8% of the enlarged company (on a diluted basis) and would have been entitled to further increase that stake without being subject to the 20% limit under the Australian takeovers provisions.

Following Rio's emergence on the register of Kalahari and Extract, concerns were raised by a number of Kalahari's larger shareholders about the potential for Rio to acquire effective control of the merged company without paying a premium for doing so. In addition, a number of those shareholders were concerned that Rio's material holding in the combined group would give it an unhealthy level of control and/or influence in relation to any future negotiations involving a potential transaction between Rio (or its related company, Rossing Uranium) and the merged company either at the asset or the corporate level.

Kalahari therefore sought further guidance and assurances from Rio regarding its intentions for the future control of the enlarged company.

In particular, Kalahari sought a commitment that Rio would not increase its shareholding in the combined group for a period of time after the merger was implemented (subject to a number of agreed carve-outs such as a third party making an offer for the merged company).

Unfortunately, it is now apparent that a standstill commitment will not be able to be agreed with Rio on terms which would satisfy the concerns raised by Kalahari's shareholders.

Kalahari has therefore advised Extract that it does not have the support of its major shareholders to pass the requisite resolutions at the planned meeting of Kalahari shareholders and the Restructure will not be able to be implemented."