JSE Advice - Gold One

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Wayne_Potgieter

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Ok, so forgive my ignorance.

I recently bought a number of shares in a JSE listed company.

The company is called Gold One.

On Monday it was announced that a chinese company had bought controlling stake of Gold one.

Since then, i received an email from FNB (my Broker house) telling me that ANOTHER Chinese consortium was making an offer for my shares (see below copy of the mail)

My question is this, Will i have to sell my shares? i dont want to, i believe they will appreciate much more over time and would like to keep my slice intact. can anyone with more experience help me?

Gold One International Ltd (GDO)

Proposed Offer

Consortium of Chinese investors, acting through BCX Gold Investment Holdings Limited (Bidco), has proposed an offer to the shareholders of Gold One International Limited (Gold One) to acquire their shares in exchange for cash. In terms of the offer, Gold One shareholders may accept the offer, in whole or in part of their shareholdings. The proposed offer is subject to shareholder approval at a meeting to be held on 22nd July 2011and the obtaining of the required regulatory approvals.

Offer Consideration- ZAR4.08 per share in exchange for every Gold One share tendered

Salient Dates

Offer Opens – 22nd June 2011.
Closing Date- 21st September 2011

No further information or salient dates are available. We will advise upon receipt of further information.

Should you require further assistance or clarification please do not hesitate to contact me.

Thanks and Regards
 
If a company is taken over usually all shares are taken over as well, either in exchange of money or new shares. if there is no bidding war and the deal is done, you will, as you have been, offered a fair price for your shares.

So to answer your question, if you don't want to sell you can only take out new shares if they offer it, if not, you have to take the cash if the offer is accepted by the shareholders.
 
You can sometimes hang on to your shares if it is a cash offer, but then the shares will likely be delisted and you won't have a way to sell them. In short, unless you are a major shareholder you will have to just go with the flow.
 
You can hang on to the shares. Its just an offer, you are free to accept or decline.

Also, JSE rules say that a controlling stake is 20%+ afaik, not 50% (majority stake).
 
HavocXphere said:
You can hang on to the shares. Its just an offer, you are free to accept or decline.

Also, JSE rules say that a controlling stake is 20%+ afaik, not 50% (majority stake).
Click to expand...

Chinese company 1 has bought controlling stake of Gold One. Now all of a sudden Chinese company 2 comes and wants to take over. My stomach tells me that Chinese company 1 will not decline the offer at the shareholder meeting and will bend. So how is he supposed to decline anything?

As far as I am concerned the email he got was not a question whether he agrees but purely for the purpose of informing him that this is what's going to happen.

Please correct me if I'm wrong.
 
Bronzed_Skarab said:
You can sometimes hang on to your shares if it is a cash offer, but then the shares will likely be delisted and you won't have a way to sell them. In short, unless you are a major shareholder you will have to just go with the flow.
Click to expand...
They may or may not be more difficult to sell, but you'd remain a part owner.

Anony-mousse said:
As far as I am concerned the email he got was not a question whether he agrees but purely for the purpose of informing him that this is what's going to happen.

Please correct me if I'm wrong.
Click to expand...
In terms of the offer, Gold One shareholders may accept the offer, in whole or in part of their shareholdings.
 
No, you can't stay a part owner if the company is taken over and doesn't give out new shares. If the controlling party decides the company will be sold than that's the way it is and you get your money at market value. Nothing you can do.

In any case, I am taking everything back I said if it turns out I'm wrong.
 
Anony-mousse said:
No, you can't stay a part owner if the company is taken over and doesn't give out new shares.
Click to expand...
Sure you can. Find a set of consolidated financial statements using IFRS (listed/unlisted). Consolidated Statement of Changes in Equity, look for a column called "Non-controlling interest". Thats the "part owners".

Anony-mousse said:
My stomach tells me that Chinese company 1 will not decline the offer at the shareholder meeting and will bend.
Click to expand...
Doesn't matter. They can only decide for their shares, not everyone elses. They wouldn't accept the offer anyway....only once its clear that their own attempt will fail.
 
HavocXphere said:
Sure you can. Find a set of consolidated financial statements using IFRS (listed/unlisted). Consolidated Statement of Changes in Equity, look for a column called "Non-controlling interest". Thats the "part owners".


Doesn't matter. They can only decide for their shares, not everyone elses. They wouldn't accept the offer anyway....only once its clear that their own attempt will fail.
Click to expand...

The controlling part decides for all the shares and the non controlling interest is just this, non controlling interest, which, in this particular case, gets liquidated by getting paid out.

What's happening here is that the majority shareholder is obviously buying out the minority. Simple as that. And majority can force minority to accept, there is nothing they can do.

This is a textbook example of a common buyout situation.

OP, you have to let us know the outcome of this story! I am really curious about this.
 
Interesting that fnb are asking you this even before the meeting!! Generally you would be asked this after the meeting, in any case it does not sound like you have to sell your shares just yet. It may be decided at the meeting that either all shareholders have to sell a portion of their shares, a few of the larger shareholders will sell their shares or that the deal does not take place. So, you have to wait to see what option forms are sent to you, as that will give you a chance to vote on the option you would like as a shareholder
 
Anony-mousse said:
The controlling part decides for all the shares
Click to expand...
The controlling part has control over the company & the company's actions, not other shareholders property (shares). This isn't a land redistribution scheme, you can't sell something you don't own.

Anony-mousse said:
What's happening here is that the majority shareholder is obviously buying out the minority.
Click to expand...
No its not. As I already explained, this is a JSE communication meaning control = 20%. No majority involved.
 
HavocXphere said:
The controlling part has control over the company & the company's actions, not other shareholders property (shares). This isn't a land redistribution scheme, you can't sell something you don't own.


No its not. As I already explained, this is a JSE communication meaning control = 20%. No majority involved.
Click to expand...

To understand correctly:

You are saying there is nothing like a controlling stake in this case?

The Chinese company purchases gold one, or are targeting to purchase 60-75% of the shares respectively, this is their goal (http://www.miningmx.com/news/gold_and_silver/Chinese-group-confirms-Gold-One-bid.htm)

You say the OP has freedom of choice whether he will be compensated with cash, new shares or most probably a combination of both? What is the other option? To refuse to sell?
 
Anony-mousse said:
You are saying there is nothing like a controlling stake in this case?
Click to expand...
I said "No majority" not "no controlling stake". As explained twice already the two are not necessarily the same if using the JSE definition of control.

As OP posted, the 1st Chinese company has bought a controlling stake. Meaning 20%+. Not 50%+ majority.

Anony-mousse said:
You say the OP has freedom of choice whether he will be compensated with cash, new shares or most probably a combination of both?
Click to expand...
You're the only one in this thread talking about new shares. Its not in the offer as posted by OP and I never mentioned it so not quite sure how you figure I said it. :confused:

Anony-mousse said:
To refuse to sell?
Click to expand...
That is traditionally one of the options available when receiving an offer.
 
HavocXphere said:
I said "No majority" not "no controlling stake". As explained twice already the two are not necessarily the same if using the JSE definition of control.

As OP posted, the 1st Chinese company has bought a controlling stake. Meaning 20%+. Not 50%+ majority.


You're the only one in this thread talking about new shares. Its not in the offer as posted by OP and I never mentioned it so not quite sure how you figure I said it. :confused:


That is traditionally one of the options available when receiving an offer.
Click to expand...

What I meant by freedom of choice was because you basically say he does not have to accept the offer even if the offer is accepted at the shareholder meeting? I wanna see that.

IMO he will not have the option to refuse and will inevitably be compensated with new shares or cash or a combination of both. That's the only thing that traditionally happens.

They are aiming to purchase 60-75%, that's why I posted the link.

To be continued once the OP found out. Looking forward to it.
 
I would sell the shares. If the offers are good you're probably going to make some nice profit out of this. Take the profit and reinvest elsewhere. thats my 2c.
 
Anony-mousse said:
What I meant by freedom of choice was because you basically say he does not have to accept the offer even if the offer is accepted at the shareholder meeting? I wanna see that.

IMO he will not have the option to refuse and will inevitably be compensated with new shares or cash or a combination of both. That's the only thing that traditionally happens.

They are aiming to purchase 60-75%, that's why I posted the link.
Click to expand...
Lets assume for a second that what you say is true. Shareholder meeting accepts it and because as you say there is no right to refuse, so everyone (including OP) is forced to comply & sell their shares. Now they've got 100% of the shares. Doesn't exactly line up with their stated aim of acquiring 60-75% now does it?
 
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HavocXphere said:
Lets assume for a second that what you say is true. Shareholder meeting accepts it and because as you say there is no right to refuse, so everyone (including OP) is forced to comply & sell their shares. Now they've got 100% of the shares. Doesn't exactly line up with their stated aim of acquiring 60-75% now does it?
Click to expand...

ponder said:
NO. You own the shares and you can't be forced to sell them, end of story.
Click to expand...

I'm inclined to agree.

The opposite is true, if a certain percentage is made an offer (something like 35% or 60%, I can't remember) then it triggers a mandatory offer to minority shareholders. But you can't be forced to accept an offer for your shares.
 
ponder said:
NO. You own the shares and you can't be forced to sell them, end of story.
Click to expand...

Assuming the shareholders at the shareholder meeting come to an agreement to sell the company to the new owner. What will happen to OP's shares?

A: Nothing
B: Will be exchanged for new ones
C: I get cash that was offered
D: I will refuse to sell and keep my shares of a company that basically doesn't exist anymore
 
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