Prosperity Minerals Share Discussion Threads

[actuary78] 25/7/2013 14:52

fft - if this falls through it is heading back towards 80p, if only temporary.

So, assuming a 5%pa interest rate and your 3 month settlement, 125p implies a >90% chance of the deal going through. Pretty high - given they haven't disclosed getting anybody independent on side yet.

I think it will happen, and so does the market, but 125p to Buy doesn't seem like a bargain to me, givent the downside risk if this falls through.

[edmundshaw] 25/7/2013 09:35

fft I think stamp duty is abolished from April 2014.

[fft] 25/7/2013 08:28

WINS are still willing to sell in quantity 20k+ at least at 125p. Assuming the 130p is paid out in less than 3 months that is close to an annual return of 20%.

curious. is someone smelling a potential problem ?

And, now, there is no stamp duty on AIM stocks, so dealing costs are low.

[dr contrarian] 24/7/2013 12:35

Think this is looking a done deal at 130p, those expecting more than this are being very hopeful.

PIHL, PMHL Management and LIM combined own around 75% of the stock, which is the key % necessary for delisting the shares from AIM.

I am sure the company has also talked to Mackenzie over the last week or so, with them on board the % acceptances rises close to 90%, at which point the remaining shares are compulsory purchased.

[0rb1t] 24/7/2013 12:01

To me it looked like PIHL were making deals that were not beneficial to PMHL. Such as property deals that would benefit other parts of PIHL but not PMHL. Iron Ore offtake agreements that looked like they tied up substantial sums of cash for little return. Share buybacks timed just before share bonuses to inflate the bonuses that were then paid in cash. Or maybe these were just unfortunate business decisions.

Fortunately for shareholders it looked like LIM Asia Special Situations Master Fund got some guarantee.

4 February 2013

Prosperity Minerals Holdings Limited
("Prosperity" or "the Company")

Granting of put options over Prosperity's shares by its majority shareholder


Prosperity notes the announcement made by its majority shareholder, Prosperity International Holdings (H.K.) Limited ("PIHL"), today on the Hong Kong Stock Exchange.

PIHL has granted put options (the "Put Options") to LIM Asian Multi-Strategy Fund Inc. and LIM Asia Special Situations Master Fund Limited (together "LIM Advisors") in relation to their entire aggregate interest in Prosperity, being 7,869,396 shares (the "Option Shares") held by LIM Advisors, representing 5.49% of the Company's issued share capital. At the same time, PIHL announced details of a proposed issue of convertible notes over PIHL shares to LIM Advisors (the "Convertible Notes").

Under the Put Options, LIM Advisors can require PIHL (or its nominee) to purchase all or part of their Option Shares (and any shares deriving from their Option Shares) at an initial exercise price of £1.30 per Option Share (the "Exercise Price"), subject to adjustments, at any time over a two year period commencing from the issue date of the Convertible Notes. PIHL has agreed to pay the Exercise Price by issuing PIHL shares at an initial issue price of HK$0.50 per PIHL share (subject to adjustments) equal to the aggregate Exercise Price payable for the Option Shares. If PIHL does not complete the issue of the Convertible Notes to LIM Advisors, the Put Options will terminate.

PIHL holds 91,865,324 shares in Prosperity, representing approximately 64.07% of the total issued share capital. If LIM Advisors require PIHL to purchase all their Option Shares, the percentage interest held by PIHL in Prosperity will increase from 64.07% to approximately 69.55%

[fft] 23/7/2013 13:05

I had a look at the Mackenzie website and a number of funds do have small(ish) holdings in PMHL. all the ones I spotted were less than 3%. I suspect that they should aggregate these for reporting whenever they buy or sell shares in an individual fund, but the lack of any rns from them indicates they havnt.

btw, looking at the original cost and value now (3 months ago) that even the current price leaves them heavily underwater.

I would be surprised if PIHL hadn't talked to them. It means the real free float in PMHL has been even lower than I thought.

[mattjos] 23/7/2013 12:40

looks like he'll sell the cement assets straight after the deal is done and effectively pick up the rest of the business for virtually nothing. Cant blame him for this. AIM market just not a suitable domicile for this company.
Spin it back out onto HKSE in a years time and he'll be laughing all the way

[rupe1958] 23/7/2013 12:28

fft - Morningstar is likely to be right as at 30/4/13. Whether there's been a change since then I don't know.
I agree that PIHL would definitely have talked to Mackenzie already if they still hold 16,786m shares. They may have made an irrevocable declaration. Hopefully we'll know by the end of the day.

[beefeater25] 23/7/2013 12:25

fft - Not necessarily. Same thing happened with Dragon Oil a year or two ago. They held a majority shareholding and everyone got together to stop the lowball bid going through.
Worth reading up on. It is possible.

[fft] 23/7/2013 11:50

Are you sure that Morningstar is right ? There is no mention of Mackenzie in the major shareholder list on PMHL website, or in any RNS I have checked regarding holdings.

LIM are mentioned, and Morningstar does not mention them.

BTW, PIHL would not go to the expense of arranging finance, lawyers and the rest (1m+) if they did not already have all the major holders onboard. it is a done deal which is why it was only a week between the initial 'possibility of offer' and the actual offer.

[philjeans] 23/7/2013 11:46

Quite agree Rupe. I'm holding 60k so that's a start and I'll not accept currently.

Thank you for your hard work here.

[joe say] 23/7/2013 11:35

Go Rupe, go Rupe

[rupe1958] 23/7/2013 10:47

Seems to me that the chances of forcing a better offer are quite good here.

PIHL/JETGO (the bidder) has to get 90% acceptances. Looking at the offer doc page 7:
"The Offer is conditional upon, amongst other things, valid acceptances being received in respect of such number of PMHL Shares which will result in the Company (directly and/or indirectly through Jetgo Bidco) holding in aggregate not less than 90% of the total number of PMHL Shares, including the PMHL Shares already held by the Company."

I'll try to find out who the key person in at Mackenzie at make them aware how incredibly low this offer is.
I'm sure that Aurora IT (Mars Asset Management) will be rejecting the offer. All PI's should do the same, IMO.
We can definitely push the offer to 150, maybe higher.

[edmundshaw] 23/7/2013 10:01

The company has never been so good with communications until the last month. Strange, that...

[philjeans] 23/7/2013 09:43

Good work Rupe - keep it up.

We've nothing to lose by stirring it a bit!

[rupe1958] 23/7/2013 09:34

Interesting to see that Mackenzie Investments have over 10% here.

I wonder if they will try to push up the offer. They are in a position to do this, I think.

[rupe1958] 23/7/2013 08:54

ECF - LIM are owned by an American hedgie of about 60, resident in HK, called George Long. Used to be called Long Investment Management, hence LIM. One of the longest-established hedge funds in HK. No obvious connection to Wong.
George Long is the Chief Investment Officer, but my research suggested that they appointed a new head of equities last year called Linda Cai, ex GS. She's probably the decision maker here.
This HKSE rule obliging LIM to abstain seems a bit strange. Why should a 'material interest' in the offer oblige LIM to abstain? All seems very convenient to the offer-makers.

I wonder what the cut-off between material and non-material interest is? Maybe 5%.

[eddie catflap] 23/7/2013 07:43

You're welcome Rupe1958.

I'd started looking into LIM Asia a few weeks ago. I'd wanted to see if there was any connection with Wong. I wondered whether he could use them as part of a concert party. Didn't find out much to be honest.

If you read the 'reasons for takeover', PIHL paint such a bleak picture of PMHL, you'd think they were doing us a favour. Really wanted to see the actual property profits that were so well researched by the stalwarts of this board.

[rupe1958] 23/7/2013 07:07

Eddie CF - thanks for that. You've saved me time that I was going to spend trying to contact the manager of the LIM Asia fund and putting him/her together with other insti investors.

We should be getting at least £2 here. But looks like a done deal at 130. COuld be alot worse, but I was hoping for so much better.

[eddie catflap] 23/7/2013 06:56

LIM fund mentioned here...page 16...



Pursuant to the requirements of the HKSE List
ing Rules, the LIM Funds (who together hold in aggregate 54,883,400 Shares, representing approximately 0.86% of the issued share capital of the Company as at the date of this announcement) shall abstain from voting on the
resolution(s) to approve the Offer and the Option Offer at the SGM as they hold, directly and indirectly, in aggregate 10,259,396 PMHL Shares (representing approximately 7.15% of the total number of PMHL Shares in issue as at the date of this announcement and are hence considered having a material interest in the Offer

[fft] 23/7/2013 04:51

Confusingly, PIHL is down this morning on the HK market. Either PIHL is an undervalued stock or PIHL is being overlooked or there is something going on that we are unaware of.

btw, volumes are good.

[bbluesky] 22/7/2013 22:25

I blame AIM: a ludicrously xenophobic inefficient market. Promised something and London is an ultimate foreign destination, but not for tiddlers it seems. The ISA aspect is a bit of after the horse has bolted..Great thanks to Dr C and Celeritas for all your input. Personally no blame to Wong, wouldn't have much time or repect for this exchange,PIHL is an option of course..the deal is another good one - his track record grows

[philjeans] 22/7/2013 21:03

The whole Wong empire is a friggin stunt - which is why I won't be buying PIHL in a hurry!

130p - daylight robbery!

[topvest] 22/7/2013 20:29

They have moved the AGM back from the end of August to mid-Oct. A nice little stunt so that the 3c all goes to PIHL.

[topvest] 22/7/2013 20:21

Good news then with the 130p offer. Looks like we can say goodbye to the 3c dividend though!