takeover, page-2

This takeover is quite similar to Xstrata's t/o of Sphere Investments. they (Sphere) had VERY large magnetite assets in Mauritania, Africa (several billion tonnes at 30-39% Fe). They lacked the high grade hematite cap that SDL has, BUT they have an existing railway right next door and a port already up and running with their JV partner (JV on a portion of their tenements (Govt owned SNIM)). So lower grades than SDL but NIL (-ish) infrastructure costs compared to SDL.

In order for Hanglong to win the takeover of SDL they need to acquire 90% and then they can proceed to compulsory acquisition and take everybody out by law. If they don't reach 90% the company will stay listed BUT liquidity will be poor because there are few buyers (the closer to 90% the crapper the liquidity!!). There is also a risk if they get close to 90% that they will simply de-list the company and then, while the shares are still "valid", there is no market.

On the other hand they may launch a later mop-up bid and take out the remaining minority holders for a fantastic premium- YOU NEVER KNOW YOUR LUCK.....

If Hanglong proceed with the takeover and fall far short of 90% they are somewhat trapped and the company will still be in play.....

If you look at SPH which is STILL listed (and was taken over at $3, with Xstata ending up with an agonisingly close 89%...) you will see NO liquidity so there are risks in not accepting the takeover when offered. There are also risks in accepting TOO EARLY- you might miss out on the above!!! In the end the question is: Do you believe in the quality of the SDL assets? If so maybe hang on for the ride. If not, take the money and run!!!!

I recommend you follow the SPH threads over the years to understand the forethcoming ride.

By the way, SPH went from a LOW of 20c up to the takeover price of $3 with no new information within a year or two- so, so much for market intelligence!!