The long talked about potential buyers interested in Metal Tiger has finally come to fruition with the release of the RNS on the 25th November.
The game of chess has started and these are some initial thoughts.
Offer for the MTR business
1. No offer made for MTR.
2. If an offer made would shareholders, the BOD and Ex BOD CP accept an offer so low?
3. Any offer will go to shareholders who will vote. If shareholders aren’t happy with any offer they will reject it. It is clear from bulletin board chatter that BMR and MTR shareholders are unimpressed with current potential deal.
4. Would the BOD recommend to shareholders that they accept any offer that valued the business at less than the market cap of the business?
1. Paul Johnson was buying MTR shares at 2p a share couple of weeks ago. Would he do that if he thought this was the end game?
2. The BOD would lose their credibility if shareholders don’t receive value for their investment and their commitment to the business and BOD.
3. This has to be part of a plan to maximise returns for the BOD and by default shareholders.
4. BOD have been buying shares at significantly higher levels than offer expected from BMR. Paul Johnson was buying at 5p.
5. Have the scoping announcement coming in the next couple of days. Why would MTR bring forward if thought deal done at the level in the RNS?
6. Why are MTR attending an event today with shareholders if the business is being sold?
7. Announcement means everybody over 1% holding has to declare their hand. We will know who has been shorting the stock (Note 9(b) to Rule 8 of the Takeover Code).
8. Anybody else who wants to bid for the business has to put their bid in before the 23rd December.
9. Those short need to close their positions.
10. What a brilliant time to release the RNS. Nobody can do anything until Monday. Shareholderscan’t be spooked into making a rash decision.
11. If you wanted to pay £30k for a car, your first offer wouldn’t be £30k.
12. The scoping study will probably be released Sunday night. I wouldn’t be surprised if the shares are suspended then.
13. The BOD have consistently told us they would enrich longterm holders and make those shorting the stock suffer.
14. Terry Gammer said at an event his biggest worry was shareholders would accept a low ball offer for the business. He hasn’t got to worry about this potential offer.
15. If the offer had been any larger BMR shares would have been suspended.
16. One of the latest RNS’s stated that MTR had received interest from more than one party. They now need to show their hand.
It is now clear why the MTR price was being depressed.
Many will now have to submit a form 8.3 to declare their holding over 1%.
This is just the start.
Whatever happens, shareholders, when an offer comes in will vote. Any offer has to be pitched at a level that the majority of shareholders will accept.
The glass needs to be filed a lot more before shareholders will be interested.