So... after a little more pondering (yes.... SPR is on my mind a lot, but.... I think it likely the same for others!).
Firstly, as I have mentioned, there must be some incredibly tense negotiations going on between RMS and SPR. Why do I think this.... because the purchases of 17.94% of SPR, is unlike any other corporate move RMS has done (out of the last 7 corporate transactions). Different how you ask?
Well... I can be honest, my memory of all 7 were hazy until I started digging. Some of the 7 are not that relevant, because they are simply purchases of assets, not listed companies, so the first 2 on the list are irrelevant.
No.3 - Tampia (Explaurum). RMS made their first offer on the 10/9/2018. Interestingly, it was semi-hostile. RMS started with no shares held in Explaurum at the start either. It took just under 5 months for RMS to achieve 90%. It was actually quite a complicated and drawn out deal, because.... RMS had competition, and not from another bidder. Basically, ALK attempted to fend off the deal with an injection of cash (a totally viable option for SPR....)
Note, no minimum acceptance threshold.
No. 4 - Penny (Spectrum) - RMS purchased 4.9% before making the offer... Offer made, 10th of Feb 2020, achieved 50.5% by March 18th, but it takes until the 7/5/2020 to get to 90%.
Note the 50.1% threshold, versus none in the earlier T/O.
No.5 - Rebecca (AOP). Offer made on the 18th Oct 2021, though like the Explaurum action, RMS faced competition, this time with a rival bid. GOR made a bid (they had purchased 19.9%) which RMS counted and whilst doing so, got agreements by a separate 19.9% of major holders to accept their increased bid which won (GOR eventually accepts RMS offer. RMS achieved 90% by the 3/12/2021
Note... the initial 90% minimum acceptance (which quickly went unconditional to counter GOR).
No 6. Roe (BRB). Initial offer on the 20/3/2023 - RMS are getting better at locking up deals, to reduce potential rival bids.... there were none.
RMS achieved 'control' of BRB on the 3/5/2023 with 50.1% and achieve 90% on the 15/5/2023. To be blunt, BRB was weakly held and had done very little for many years... so stale/trapped holders were eager to move on.
No.7 Musgrave (MGV). Unlike all the above transactions, RMS was not the first bidder, WGX was on the 6/6/2023 (which the MGV board rejected).
RMS initial bid occurs on the 3/7/2023. RMS held no shares in MGV prior to this, but WGX did (only 2.3%).
RMS achieves 90% on the 15/9/2023.
So...
Overall, only once in the 5 takeovers, did RMS actually having any shares in their target (4.9% in Spectrum). So if RMS make an offer, will it be 50.1%, or 90%? Will they achieve the support of the SPR board? Or... will they "put the offer directly to shareholders" like what happened with Explaurum?
RMS has 17.94% in SPR. That is a huge difference and... if I can speculate on some of the potential reasons:
* The first is, SPR have a strong board and management that can actually get Dalgaranga back into production, versus all the other targets that were basically just explorers.
* Never Never discovery is simply one of the best in the sector, and RMS is not blind....
* In most cases, RMS had already been able to get their targets boards to approve their offers (I can only assume that SPRs board to date are not so easily swayed, which makes sense, because... other than Spectrum, RMS earlier targets had not discovered a resource like NN nor have a near new plant).
* SPR is in a very strong financial position and can actually get into production relatively quickly compared to all the other acquisitions and hence, RMS simply cannot risk any other entity getting control of SPR.
* As I have discussed, RMS 'window' of opportunity with large cash generation from Penny being short lived, now is the time to make the sort of acquisition that can set the company to 'level up' their asset quality so to speak (NN will be a long life, low cost U/G mine), plus Enda May will finish up end of 2024.
* Unlike almost all the other examples, SPRs largest holders are sitting on substantial gains, yet are basically funds, which require tangible gains to be made within a 12 month period to make their results/reports impressive, though Delphi has been in SPR for a few years now. So willing sellers at the right price even if they are passing off further large potential upside when NN starts being mined.
* If RMS tried to do T/O SPR in 12 months time, they would be a 240k p.a producer, with a single plant, with SPR potentially producing almost similar ounces, at lower costs, so... RMS script is strong and the best time to use it, is when its fully valued.
* RMS (MZ) have been banging on about a '3rd' hub for years.... literally.
* SPR does not yet have it's reserves out, nor a definitive timeline for production (not necessarily a weakness, just a fact).
* SPR may actually have a larger reserve than RMS in the near term with RMS (as of June 30 2023, they had 930k ounces in reserve) having less than 1m ounces (their mine plan includes more, but... many producers do that. SPR could potentially double RMS reserves... and greatly increase the overall grade).
* RMS has a lot of cash, SPR has an excellent asset to throw that cash at.
* WGX is busy with Karora... so again, a window of opportunity and what I had viewed as the only other logical bidder (at least in regards to synergies).
* 17.94% gives RMS a strong starting position, with a clear blocking stake to any other competitor, though this came at great cost, $180m. If... if a deal eventuates, that money is basically gone. It could be viewed as a buyback of sorts for the merged entity.
* While SL has proven himself, he has also been very honest that he will do what needs to be done, to make hard decisions, even... potentially when it comes to giving up being the MD (not that he has said exactly that). A lot of egos in the sector cannot this.... this could be a huge factor (but potentially never learned about publicly whatever happens).
Interested to hear others thoughts on what other strategies or rationale RMS might have, but also, how SPR might defend itself, or... perhaps a better way to state it, is to ensure it controls it's own future.
The race is on... with the mid tier consolidation.
RED + SLR = 400k+ producer
WGX + Karora = 400k+ producer
GMD +? OBM? = 400k producer
RMS +? SPR = 400k+ producer
Apologies for any mistakes etc (the T/O information particularly, as I was not a holder of some of them, so others may have far better knowledge).
(20min delay)