I believe 75% is the correct figure, and 90% for the offer to be compulsory.
The CP require another 15%, or from a different perspective, nearly 40% of the remaining minorities would have to vote in favour.
I suspect if the shares are at 4.5p and the offer is at 1p this may be difficult to achieve. Perhaps the CP can continue to purchase in the open market, but if the recovery is achieved shareholders will not be willing to part with the shares unless they pay up.
With due respect therefore, I think we are not simply beholden to the goodwill and morality of management as you initially described.
Briefly and entirely from memory - I believe that such a vote requires 75% of the shareholders to approve.
60% or thereabouts would come from the collective holding of Miguens/Concert Party the remaining 15% would be required from the remaining shareholders.
Without knowing exactly who owns the 40% of the shares that fall outside of the Concert Party/Miguens shareholding it is impossible to know whether there are enough shareholders who could be persuaded to vote with the Miguens/Concert Party to force such action through.
What I do know is that in 3 years the Concert Partys share holding has risen from 32.33% to over 60% of the company which has closed the gap towards the 75% threshold. I also know that the highest price paid for a share by the Concert Party in the preceding 12 months has been 1.00 pence.
At best this is a precarious position for those of us who fall into the minority shareholding group.
Since its launch in 1995, the AIM Market of the London Stock Exchange (AIM) has attracted growth companies from all over the world in a wide variety of sectors, providing an appealing means for small to medium size businesses to raise funds for expansion.
For a variety of reasons, many commentators expect there to be considerable consolidation in the AIM market during the next 12 months. This briefing provides a high level overview of some of the key issues that a potential bidder will need to be aware of when considering launching a takeover of an AIM quoted company including, in particular, whether or not the UK City Code on Takeovers and Mergers (the UK Takeover Code) will apply and the implications that this will have on timing and structure. This briefing is not, however, intended to provide a detailed guide to the issues and process involved in an AIM takeover as these can often be complex and will invariably depend upon the facts of the specific transaction.
What is the UK Takeover Code?
The UK Takeover Code is a detailed set of rules governing the conduct of takeovers of (and acquisitions of significant interests in securities in) certain companies which are incorporated in the UK, Channel Islands or Isle of Man and/or have their securities admitted to trading on a regulated market in the UK. It imposes extensive obligations and restrictions on both the bidder and the target (even in circumstances where no formal offer has been launched by the bidder) and also sets out certain over-arching principles in light of which the application of the relevant rules should be considered - these include:
equality of treatment for target shareholders;
providing target shareholders with sufficient information to make an informed decision on the merits of a bid;
avoidance of creation of a false market in the securities of the bidder or target; and
certainty of deliverability of an offer, in particular in relation to the consideration to be offered to target shareholders.
The UK Takeover Code is interpreted and applied by the UK Panel on Takeovers and Mergers (the Panel) which has the power to impose a range of sanctions for non-compliance. The Panel will also provide guidance to targets and bidders (and their advisers) in relation to any complex issues or questions of interpretation of the UK Takeover Code that may arise on a particular transaction
Does the UK Takeover Code apply?
Since AIM is not a regulated market, the application of the UK Takeover Code is not automatic and may change depending on the prevailing circumstances of the target company.
If an AIM quoted company is incorporated in the UK, Channel Islands or Isle of Man, the UK Takeover Code will apply if the company is considered by the Panel to be centrally managed and controlled in the UK, Channel Islands or Isle of Man. In assessing the place of central management and control, the Panel will predominantly focus on the residency of board members. Changes in board composition can therefore affect an AIM companys UK Takeover Code status, and historic statements (such as any statements made in its Admission Document or previous announcements to the market) cannot be relied on as an accurate indication of the current position (see, for example, Cape Diamonds Plc). This means that the application of the UK Takeover Code can be particularly problematic in relation to the significant number of AIM companies that, although incorporated in the UK, Channel Islands or Isle of Man, are centrally managed and controlled elsewhere. The UK Takeover Code will not apply to AIM quoted companies which are incorporated outside the UK, Channel Islands and Isle of Man, although there may be other local takeover regulations which apply in their jurisdiction of incorporation or other jurisdictions in which their shares are traded, and this should always be checked.
Miguens holds just under 54% of the company and the Concert Party/Miguens combined hold just over 60% of the company.
This means that Miguens and/or the Concert Party have certain legal obligations under City Code Of Takeovers & Mergers as their percentage of the company exceeds exceeds 30% which is the point where this kicks in.
An offer under Rule 9 of the City Code must be made in cash and at the highest price paid by the person required to make the offer - or any person acting in concert with him - for any interest in shares in the company during the 12 months prior to the announcement of the offer.
However this right can be waived by the shareholding majority and as Miguens/Concert Party have the shareholding majority this obligation can be waived if they so wish until the time suits them.
Any change of shareholding by a substantial shareholder is a notifiable event and being a notifiable event you will note that the highest price paid for a share in PGD by Miguens and/or the Concert Party in the preceding 12 months is 1.00 pence.
This means that if they did not waive that right then they can legally bid for our shares at 1.00 pence per share.
I hope this explains the point that I am making.
I raised this as a concern on this bb back on 18/11 2014 which I cut and paste below for your interest even though the share price and shareholding percentages were different at that time. You will however note that this was the point in time that the 30% threshold share ownership was breached and Miguens/Concert Party took effective control of the company.
"Good morning All
Having been around these markets for some time in a professional capacity though be it now purely as a private investor - I tend to look at things objectively rather than be blinded by positivity or negativity.
I posted earlier that I was concerned that we are being lined up for being taken out by Carlos and his family/friends which many felt was not the case.
Reading the most recent RNS and all of the attached information - I detail my concerns below:
In the latest RNS it stated that Carlos and his family/pals known collectively as the Concert Party will own 34.19% of the company which under normal circumstances would trigger a mandatory bid for the company which is not happening at this stage due to that right being waived purely because our Directors consider the terms of the Rule 9 Waiver to be fair and reasonable.
NOWHERE does it state that such an offer will not come or be triggered in the future.
Should the Concert Party decide to exercise this right in the future under the City Code Of Takeovers & Mergers - namely - An offer under Rule 9 of the City Code must be made in cash and at the highest price paid by the person required to make the offer - or any person acting in concert with him - for any interest in shares in the company during the 12 months prior to the announcement of the offer - we could well be in serious difficulty because if the Concert Party waits for 12 months before exercising this right the highest price paid by the Concert Party for a share in the company will be 4.5 pence and Carlos and his family/pals will be able to make an offer for the entire company at just 4.5 pence a share.
That is my concern and always has been my concern.
Not for a second am I suggesting that this will happen - just that it could happen and we could do nothing about the 'Concert Party' exercising this right which basically puts our financial future with regard to our PGD investments in the hands of the 'Concert Party' which is a 'huge leap of faith'.
Just for your information - not intended as a de-ramp in any way - but this situation certainly makes me feel that my investment in PGD is entirely at the mercy of Carlos and his family/friends and what they decide to do moving forward.
The specific relevant details 'cut and pasted' from the R
Should PGD turn the corner and hit production targets with the POG rising dont forget that at any time Miguens/Concert Party can exercise their right to buy out us PIs at 1.00 pence per share as this is the highest price that they have paid for a share in the previous 12 months.
At best it is somewhat of a precarious position when one is reliant as a Private Investor on the goodwill of Management to put the financial considerations of the minority of shareholders over their own majority shareholding.
Whether we like it or not this is exactly the position in which we find ourselves.
Some would suggest that whilst the company stagnates at a market cap of around £21.5 million there is little point in Miguens/Concert Party buying out us PIs However if the market cap doubles or dare I suggest it gets anywhere close to the previous share placement price of 4.5 pence then why wouldnt they act and buy us out at 1.00 pence per share as they could make an immediate return by selling on what they have bought from us back from us to investors elsewhere at a higher price thus returning them all their initial investment monies?
Not a bad deal for them to end up with the majority shareholding in a company that has cost them nothing at the expense of us PIs.
For balance - others would suggest that morality will take precedence over self interest.
Hmmmmmm I wonder which route will be taken should that time come.
Are things really that bad? Probably dont have long to wait to find out: We remain confident in and committed to the future of Patagonia Gold, with improving operational performance at Cap-Oeste as production ramps up to target levels and a stabilisation in the political and economic environment in Argentina.
Perhaps Miguens is acting in a Machiavellian way, or perhaps the business would have faced complete collapse years ago without his input. Bear in mind, the company is currently indebted to the tune of $28m - it is likely that he is confident of paying that off, or he wouldnt repeatedly raise his ownership. I suspect also the 20% uptake of the OO is down to the handful of institutions that still have an interest and who will have to have been brought onside to get the funding through.
So we will shortly find out what cap oeste has to offer, happy to reserve judgement on it all until then.
So as expected Carlos Miguens now holds just under 54% of the company and the Concert Party and Carlos combined hold over 60% of the company this in turn means that the aforementioned can continue to raise their percentage shareholding in the company without having to make an offer for the rest of the company.
Private Investors are now in the shareholding minority position whereby collectively we have no voice - so Miguens/Concert Party can do what they like with the company without having to take our views into consideration.
What a deal for them we invested and supported this company through thick and thin times and now we just get squeezed out.
From a corporate perspective - borrowing funds from the banks attracts interest charges the greater the risk the greater the interest charged. The money invested by private investors to keep the company afloat in return for shares was a cheap way of raising funds at that time and having benefited from that what a fabulous idea by those in control to dilute the value of the shares held by private investors rather than worrying about having to buy out those who no longer have a voice.
Like it or lump it Private Investors can do nothing. Cleverly played out by Miguens and the Concert Party with BH facilitating this before he exited left.
Irrelevant of what the future holds for the company one thing is a dead certainty those of us who are Private Investors will never reap the deserved rewards should success ever come knocking at the companys door.
Not unexpected by me once I realised the game that was being played by past/current management .
Whilst I feel sorry for myself and the rest of us long suffering PIs - I have no idea why anyone other than the Concert Party/Miguens would have participated in the previous share placement at 4.5 pence thinking that it was a good idea at that time.
It truly worries me that either I am missing something obvious - or - the motives of those who remained bullish on these bb's at the time of the previous share placement.
I note that those who made a strong case for supporting the previous share placement at 4.5 pence now seem to be laying low and have disappeared into the sunset.
Unlike others - I am happy to admit that I made a mistake when investing in this company. I based my decision to invest on the 'fundamentals' and on or management's track record.
History has shown that the fundamentals were as expected but I made a seriously bad call on our management 's ability to effectively run a PLC. As to the way that BH backed us into a corner with nowhere to go - unbelievable.
Behind every glove puppet is the hand that works the puppet - when the glove puppet had no further use it was discarded and now the hand that was hidden is there for all to see - However the hand puppet had a legal duty to protect the interests of all shareholders irrelevant of who was pulling the strings and it is there where I believe the blame and responsibility lies.
Not wishing to point out the obvious - but how can a company raise 1.00 pence per share in a new share placement when the share price is sitting at 0.81 pence?
As I stated in my previous post:
'I wonder how long it will be before we are told that due to a lack of interest from the shareholder base to support the company with the funding that it needs that the Concert Party have decided that it has no option other than to take the company over.'
IMO trying to raise money in these markets at that price is doing no more than forcing the issue with the company having few options other than to de-list or be taken over by the Concert Party - most likely both.
Does anyone really believe that there will be huge Institutional/existing/new shareholder support to stump up the funds required and pay a 23% premium over the current share price to get involved at this price because this company has such good prospects - exceptional management and a rosy future?
Then again there were those who felt that the last share placement at 4.5 pence 35 months ago was good value so maybe Im wrong.
Maybe a rabbit will be pulled from the hat - such as a farm out to another company in which members of the Concert Party has a direct involvement? Possible but complicated with the outcome being the same should this occur.
Sadly the truth points to the fact that we are fast running out of viable options.
Thanks AoW. Can't argue with anything you've said. In actual fact I dipped in this afternoon when the price went under 1p to spend my allotted funds. Won't help PGD with their fundraising but it's looking after number one now. Truth be told, it's a relatively small amount I've put in. Mentally, I've already written off my main PGD stake. Anything I get back will be a bonus.
I genuinely wish you all the best in subscribing to this latest placement and really hope that the company turns the corner and you reap a decent return you certainly deserve it for sure however you are braver than me.
From my perspective having been invested for a long time like yourself and having watched the way in which this company has been what I see as being mis-managed including one of the most worrying aspects of the Concert Party effectively now being in control of the company as with the last share placement at 4.5 pence just under 3 years ago in which I did not participate for reasons explained at the time I will not be participating in this latest share placement at 1.0 pence.
There are many schools of thought one being that investors can take the opportunity of averaging down with the hope that a future profit can be made on the shares bought at 1.0 pence in this placement which will help offset the losses from shares bought at a higher price including the previous share placement.
Alternatively another school of thought focuses on what the market thinks of the company - and with the market cap siting at an all time low this is indicative that there is not much confidence out there.
What I dont think helped was the statement from BH at the time of the previous share placement who stated in the RNS at that time: These funds will enable us to now focus on developing the first stage of our flagship Cap-Oeste project and allow us to intensify the exploration activities on the surrounding highly prospective areas aimed at building onto our resources.
Clearly the markets have now had time to judge whether they believe that the funds raised at that time have fulfilled those stated objectives and placed the company in a better position. With the share price falling from 4.5 pence to 1.0 pence this demonstrates the markets view.
Many believed that the previous share placement at 4.5 pence was cheap and those that bought in at that price are now sadly nursing a 78% loss 35 months later which must be extremely uncomfortable and I feel really sorry for those who find themselves in this position.
There is no gloating from me about making the correct call the last time around every percentage point the share price drops I too am nursing more losses so I just wish that I was wrong rather than being right.
The only faint glimmer of positivity is that I chose not to average down at 4.5 pence during the last placement which by default has meant that I am not nursing even more losses.
For those wishing to participate this time around I really hope that this proves to be a shrewd financial move. If the market cap/share prices rises from this point on I will be nothing other than delighted for you as I will be for myself as this will reduce my loss here.
AoW- good to hear from you. This board has been very quiet for a long while.
Have to agree that as an exercise in value destruction PGD is pretty hard to beat. The impression I get is that the Board are hopping from one project to another and there doesn't really seem to have been a coherent strategy over the last few years, other than to become a small scale miner in order to fund further exploration. There was a time when there would be regular drilling updates and an encouragement that we were sitting on an ever growing resource.
That said, and with a heavy heart, I've decided to subscribe to the latest placement. My logic is that I'm hoping that we really have reached the bottom. Funny how the price fell rapidly in the month before the announcement. Hopefully there will be some modest rise over the next 12-18 months, I'll make a profit on at least part of my shareholding but overall will make a loss which potentially I can offset elsewhere. It would need something spectacular to convince me to take part in any future placing ( bonanza indicated drilling grades perhaps?).
Overall, a salutory lesson on the risks of being a shareholder.
Patagonia Gold announced proposals to raise up to approximately £8.73m, gross, by way of an issue of up to 193,963,930 new shares at 4.5p apiece on 18 November.
The fundraising, comprising a subscription of 107,572,541 shares and an open offer of up to 86,391,389 shares, was conditional upon the passing of the resolutions at a general meeting.
Managing director Bill Humphries said: "The directors of Patagonia Gold are delighted with the overwhelming support received from our existing shareholders and new subscribers for this fundraising of US$12.91m. This result is a significant endorsement in these very challenging capital markets for junior resource companies. These funds will enable us to now focus on developing the first stage of our flagship Cap-Oeste project and allow us to intensify the exploration activities on the surrounding highly prospective areas aimed at building onto our resources.
RNS 21st November 2017
"Patagonia Gold Plc (AIM: PGD), the mining company with gold and silver projects in the southern Patagonia region of Argentina, Chile and Uruguay, is pleased to announce proposals to raise £7.76 million (gross) (approximately US$10.24 million) by way of the issue of, in aggregate, 775,725,279 New Shares at a price of 1 pence per New Share for the purposes of funding the exercise of the Calcatreu Option, which would allow the Company to purchase the Calcatreu gold-silver project located in the Rio Negro province of Argentina.
35 months between both share placements with the share price falling from 4.5 pence to 1.0 pence.
The Concert Party looking to take up more share in this placement which in turn means that an offer has to be made for the company by the Concert Party for the highest amount paid for a share by the Concert Party in the preceding 12 months and that will be at 1.0 pence per share. Of course the shareholding majority can block that bid if the shareholding majority have enough faith in the company to do so.
I wonder how long it will be before we are told that due to a lack of interest from the shareholder base to support the company with the funding that it needs that the Concert Party have decided that it has no option other than to take the company over.
The writing is on the wall just a matter of when IMO.
I am sure others will disagree and come up with all manner of reasons why I am wrong.
I would be nothing other than delighted to be proven to be wrong as I along with many other have watched the market cap of this company become decimated over the past half dozen or so years which does none of us any favours.
BH engineered this backed us into a corned then exited left.
Didn't think I would ever see the day when the share price was below the level when PGD was spun out of HPD. From memory, shares were offered at 1p each back in, was it, 2003?
I continue to drip feed a very modest amount in to average down what is now a pretty hefty loss. No point is selling but I do wonder if I am putting good money after bad. My only consolation is that it must be hurting the Miguens family even more.
Oh well, one day there might be a pleasant surprise.
how does a company go from 75p 7-8 years ago to 1.5p today... ? Whilst gold has dobe reasonably well.
I cant believe its market forces... surely mismanagement is the cause of this self destruction...
Is there any hope ?
Starting to look like a decent punt...
Nice one lol, but good to see you posting again! Any thoughts on potential production in July and possibilities beyond life time of current mine? Imo still clawing their way out of the mire but perhaps a light at the end of the tunnel?
Whilst like others here I am delighted that we are pressing ahead and sinking more holes in what is turning out to be decent sized gold play I would just urge a degree of caution in that we have a finite amount of funding available having only raised 50% of what our management deemed was required during the last capital raising/share placement exercise.
I am not concerned about the forthcoming figures once the information has been collated from the holes being sunk as all the pointers indicate that we are sitting on a decent gold play my concern lies in our ability to raise the funding required to move on to the next stage.
If we go it alone and move towards production there is still much work to be done before we reach that point which involves additional funding being required. If we decide to farm out or sell out whilst both options are possible its unlikely that a third party are going to pay a huge premium above existing market cap to buy in when they know that our options are limited.
Certainly not meaning to over egg the risks but just mentioned because there are numerous companies out there who are trading at a substantial discount to net asset worth with serious amounts of in ground recoverable assets who are struggling to raise funding to enable them to bring those assets into production.
This is not just true for the precious metals sector the oil/gas sector has also been clobbered.
So if you are sitting on funding and prepared to enter what is deemed by many to be a high risk investment in these economically cautious times there are loads of bargains to consider which in turn will keep a lid on the market caps of companies in a similar position.
Just mentioned to inject a dose of reality into the proceedings whilst hoping that all will come good.
Morning all, a little more investigation and I have answered some of my previous questions. I am assuming that Cap Oeste stays with PGD and that COSE is completely separated. In which case the gold room based at CO stays with PGD and we await the recirculation results and gold production. However the prediction of an extra 19 months production was based on ore sourced from underground at COSE! So I guess we are still a partial production company.
Calcatreu seems reasonable but does need a big workup as it is just in maintenance mode with the ore classified as indicated!
So yes a good deal but we need a supply of ore identified and mined to keep the gold room running after 3 years CO extraction,
Yes, difficult to assess the impact of this latest news. However cash generation, reduction of debt and managing cash burn seem paramount so $7.5M in the bank should help.
I must admit that I am following a hold and forget strategy with PGD. Nursing some fairly heavy paper losses I'm just hoping that one day these will come good. Oh for the heady days of 70p per share in 2011!
Morning all, a bit of a surprise this morning but there was a lot of late activity yesterday! Does this mean we are back to being an exploration company? What happens to the gold room? Finally the option looks a better bet anyhow, so whats really going on?
Hope the various parties like this deal and the sp has a stimulus to head north, GLA
The Brexit vote and the election of Donald Trump drove global demand for gold to a four-year high in 2016, as pension funds and other institutional investors piled into the precious metal while higher prices put consumers off jewellery purchases.
Global gold demand rose 2% last year to reach 4,309 tonnes, the highest level since 2013, according to a report from the World Gold Council, which represents gold miners.
This was largely driven by inflows of 532 tonnes into gold-backed exchange-traded funds (ETFs), which track the spot price of gold marking the best year for ETFs since 2009.
Gold is seen as a safe haven in times of turmoil, and there was plenty of that last year. Alistair Hewitt, head of market intelligence at the World Gold Council, pointed to the shock Brexit vote and the election of Trump as US president, along with the upcoming Dutch, French and German elections. The weaker yuan and low or negative interest rates also made gold more attractive, helping push up investment demand by 70%.
Hewitt said: 2016 saw an unprecedented degree of political upheaval, which underpinned huge institutional investor flows into gold. ETFs are easy ways for people to access gold.
However, jewellery demand hit a seven-year low in 2016 due to rising prices for much of the year, while central bank purchases were the lowest since 2010, due in part to increased pressure on foreign exchange reserves.
Consumers in China and India, the worlds two biggest gold markets, bought less jewellery as the price of gold rose 25% between January and September. Prices then fell between October and December, which meant gold prices were 8% higher over the year as a whole.
Consumer buying in India and China dropped by 21% and 7% respectively in 2016. In India, rural communities were hit hard by the cash crunch caused by the withdrawal of high-denomination rupees in November, but the effect is likely to to be temporary, the report said healthy incomes from the good monsoon should support gold buying in coming months.
The price dip in November, when Trumps positive growth rhetoric led to the dollar and equity markets strengthening, contributed to a strong recovery in the bar and coin market in the final quarter, Hewitt said.
He highlighted changing tastes, with younger people in China preferring lower-grade, branded jewellery to the top grade gold favoured by their parents generation design over quality. Younger Chinese also prefer to spend their money on travel rather than material things. In the US, yellow and rose gold has gained in popularity. Gold teeth have continued their decline.
For the first time in years miners started exploring for gold again spurred on by the rise in prices, mainly looking to strike gold on the periphery of existing mines. But it will take several years for this to feed through into increased mine production.
Zero comments about the Uruguay results! I'm a little surprised as the results seem to indicate zone 13 open at depth with a area of interest 3 km long. The same seems to be implied for zones 14 and 15! Furthermore Carreta Quemada area is 30km long although no real hard data yet! Is that a decimal point typo? In any case it seems there might be a considerable amount of gold hidden in them there hills :-).
Still waiting for Mt Leon drill results and Sarita dipole numbers. Plus soon Los Toldes drilling data! Come bod please do as promised with news!
Have a good week
Good to see the latest news and will be even happier when the first gold is poured at the new site. More news next week with luck.
I don't know if anyone can answer this but it seems like PGD have a lot of gold on many sites, so is it easier/cheaper to build a heap on each site and bring the dore to the gold room, or is it better to make the gold room modular and transportable (3-4 containers?) and take it to the active site.
The bod seem to be digging their way out of the mire!
Well there are 3 working days left in October and our new fast line information bod promised several results for this month. Four things to be precise...1st gold sales, Mt Leon drilling, Sarita dipole and San Jose zona B results. Have we slipped back into the dark ages of no info once again? Actually bought some based on the possible sp effect!! That though is my problem!
After listening to the presentation and reading thru it later, it seems that a lot of information is due in October! The presentation thus was well positioned to prime us for the various information bytes due now! It maybe an interesting few weeks.
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