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LMR 5.7¢

likely to delist soon (part1)

  1. mnemonic

    5 Posts.

    Looked at the Lemur(LMR) buyback numbers over the weekend. Assuming the buyback concludes (full 10%) without any other changes to LMR’s shares in issue, or Bushveld’s(BMN) holding, BMN will end up owning 63.55% of LMR. Just how quickly the buyback proceeds remains to be seen, but it has started well. I doubt it will take 12 months. In fact, if the BoD apply to delist, it won’t need to.

    The LMR BoD would have to provide ASX with delist reasons. No problem whatsoever. LMR is now well beyond the ‘takeover’ 12month grace-period. The reasons might include (1) illiquidity - trading at a discount to cash, let alone net-asset value, is about as illiquid as it gets, (2) A majority of shares would support delisting. BMN plus Director holdings, already amount to 62.16% of LMR. (3) Company projects are African and the controlling office is now located in Jo’burg SA. (4) There may now be less than 150 shareholders, with ‘marketable parcels’ (value A$500+) of shares.

    This would be similar to the recent ASX delist application by Balamara (BMB - has coal projects in Poland). The ASX will typically respond by requiring an ‘ordinary resolution’ to be passed (simple majority) and a listed period of 1 month after the vote, to allow shareholders (who so choose) to exit. Frankly, any smaller shareholders who stay, would simply be turkeys voting for Christmas. (link) BalamaraToDelist

    Note that the BMB share-price collapsed (even further) after the delist announcement. That is to be expected, as investors rushed for the exit. Imagine how that would work for LMR, if the buyback was not yet complete. The buyback can only pay up to 5% above the preceding 5day volume weighted average (rule 7.33), so any hope of a ‘high’ price ever being paid as people exit, can be discounted. The current ~4c/share price, will with hindsight look a far better deal. Meanwhile, to help things along BMN might also opt for another (on/off market) 3%creep. I am assuming there, that buybacks are fiddled into the 3%creep rules, just as dilution was during last summer’s 3% creep.

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