What's behind the curtain...Take-over?

Massive Black Horse Chromite Discovery

Black Horse deposit has an Inferred Resource Now 85.9 Million Tonnes @ 34.5%

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What's behind the curtain...Take-over?

posted on Mar 26, 2015 01:11PM

Here is a response from my evil twin to JB on Stkhs who was expounding the possibly of a take-over at .039 to .040 per share.

jamesbay... please explain to me what, in your opinion is standard about this situation? I have personally talked to KWG about this and the opinion expressed was that KWG is worth more than that.

How high it goes does not depend on the "offer that is made" but rather the support it receives from the board, the CEO and the shareholders. In the case of a friendly TO, IMHO a single digit offer would never be supported...

In the case of a hostile TO, you have to ask yourself a few questions: 1. what the price would be once the buying company reaches 10% (90 million shares) at which point they have to divulge their intention if their goal is to TO... 2. how high would the price be driven up before they reach 85% (765 million shares) at which point the law allows them to impose a price and demand the sale of all shares. At this point the remaining shareholders can " create a dissenting action" and bring the matter to court to demand what they think is a fair price; this is what happened in the Spider TO at .19.

Please tell me that you don't truly believe that existing long standing shareholders will be selling at low prices when the projected asset value has become common knowledge.

You also have to consider that the outstanding float has become in a metaphoric way a "shareholder rights plan" given that it will take a long time to buy up all those shares in a Hostile TO, thus affording time for the shareholders to "hold out" for a higher offer without approaching the 85% line very quickly.

I also want to mention that the KWG assets are very different in their nature (claims, deposits, patent for gas process) that a potential TO might not be driven by a single entity; in this case the individual asset categories would surely command a higher price IMHO.

I certainly will not be selling under .30 (maybe .50) and after that it will be dependant on where the CEO, the KWG Board and the "insiders" decide to support an offer or "dissent" and thus argue legally for a fair price.