To the CEO, Mr Brian Flannery.
Dear Brian,
I understand that there will be a franked 50 Cent dividend to be paid at the end of October.
Is this in addition to the Final Dividend declared before the offer from Yanzhou was received?
Clearly it should be, since the Final Dividend has nothing to do with the offer. Many have pointed to this confusion.
Deloitte's Report fails to clarify this, and makes it worse by talking of further dividends [plural] payable later, probably in December.
It was my understanding that there would be a further dividend payable in December provided the deal was concluded.
I am sure most independent shareholders wish to see other bids materialising, not for reasons of greed, but because mining analysts are quite clear in their opinion.The concensus is that the right value is about AUD24 per share.
Strange that. A discrepancy of 33% seems beyond the purported claim of "Fair".
It was interesting to note that as soon as the offer was announced, Yanzhou's share price went up considerably whilst Felix's went down,
The Market was confirming who has the better of the deal, so far. It was stated that the impact on Yanzhou's earnings in 2 years' time could be as much as 37%.
If Felix could buy an asset which would enhance earnings by that much in as little as 2 years, I am sure you would grab it with both hands.Therein lies the test of "fair value".
It would seem that Deloitte, advising Felix [and therefore its Shareholders], ignored this point.
I note that they are protected from any claims of professional shortcomings in respect of the Shareholders' interests.
Who ever heard of a bidding Company offering its final bid with its first opening salvo ? This tells me they will pay more if they have to, which will make a mockery of Deloitte's "fair valuation". I imagine Yanzhou is relying heavily on the Directors' recommended acceptance, to pull it off at the first shot?
Deloitte also tries to justify the valuation by pointing out that there have been no counter offers. It is self-evident that none will emerge until the FIRB has cleared, or thrown out the Yanzhou offer. Therefore I maintain this could mislead Shareholders into the belief that this is evidence the offer fully values our Company.
If the FIRB should decide a foreign bid is not in Australia's interest, this precludes many other Parties, and narrows the field considerably. But no Australian Company would be so foolish as to mount a counter bid, until the minefield is cleared.
Trying to pull the wool in this manner shows little respect for our Shareholders' intelligence to which Deloitte is appealing, and incidentally for which we, the Shareholders are paying !!
Of course Deloitte had to decide Yanzhou's was a fair offer, because "he who pays the piper calls the tune".This was therefore a foregone conclusion.
Who ever heard of an " Independent Expert" paid by the Company being bid for, deciding a bid was too low, and certainly one has never concluded an offer was too high !!
To say the bid was too low when the Directors have already recommended it, would make the Directors appear somewhat incompetent, so we can conclude that the Fee of $200,000 was wasted, even if it was mandatory to go through this charade.
The Directors recommended the bid as "fair" before their "Independent Expert" had given its opinion !! Is this meant to imply transparent market democracy?
To suggest any "Independent Expert" is independent in this context, is risible.
The ASX and or the FIRB should establish a panel of Mining Experts to deal with situations like this, and whoever is chosen, it should be an independent choice, made by neither Party involved in the Bid. The costs should be borne equally by both Parties.This would make it genuinely independent and not the fait accompli which has been put to Shareholders today.
The argument that you, the Directors have endorsed the offer and therefore adds weight to it being a fair bid, could be riddled with holes.
Your motivations to accept, may be very different from the ordinary Shareholder, who is looking for full value for his/her investment, if it is to be snatched away and replaced with cash, which will mean tax has to be paid as well.
For this reason, many would prefer a 100% share offer from BHP.
The Directors [and any supporting major shareholders] are already fabulously wealthy, and as far as I know no details of the ongoing Terms of Service have been released, if the offer is successful. Therefore, there could be many reasons for recommending acceptance beyond the share valuation. I am not saying there are other considerations, merely it is a possibility with any takeover situation.
For the Directors, the offer is not just limited to the value of the Share offer, hence you have a different agenda from the Shareholders.
I am sure everything you have done is by the letter of the law as laid down by the ASX, and any other Regulatory Bodies.
I believe wholeheartedly that you have earned the wealth you have created, and the benefits which have therefore accrued to your Shareholders. You have grown Felix into a Company of which we are all very proud , which makes it all the more surprising that you should recommend the offer, at a price so far below that suggested by the Professional Mining Commentators.
Let me put a scenario to you.
What would be your response to the bid if you and all the Directors were in their 30s, with only limited personal Shareholdings and few other assets?
My bet is that you would all be saying "This bid is entirely inadequate. Please read our summary of the potential of the Company in the coming years, as set out in the Annual Report, and you will understand why we must be allowed to grow the Company and Shareholder value, as we have proved we can do to date. The best is yet to come !!
That is what Yanzhou believes !!
Sincerely,
"Quillan"
Dear Brian,
I understand that there will be a franked 50 Cent dividend to be paid at the end of October.
Is this in addition to the Final Dividend declared before the offer from Yanzhou was received?
Clearly it should be, since the Final Dividend has nothing to do with the offer. Many have pointed to this confusion.
Deloitte's Report fails to clarify this, and makes it worse by talking of further dividends [plural] payable later, probably in December.
It was my understanding that there would be a further dividend payable in December provided the deal was concluded.
I am sure most independent shareholders wish to see other bids materialising, not for reasons of greed, but because mining analysts are quite clear in their opinion.The concensus is that the right value is about AUD24 per share.
Strange that. A discrepancy of 33% seems beyond the purported claim of "Fair".
It was interesting to note that as soon as the offer was announced, Yanzhou's share price went up considerably whilst Felix's went down,
The Market was confirming who has the better of the deal, so far. It was stated that the impact on Yanzhou's earnings in 2 years' time could be as much as 37%.
If Felix could buy an asset which would enhance earnings by that much in as little as 2 years, I am sure you would grab it with both hands.Therein lies the test of "fair value".
It would seem that Deloitte, advising Felix [and therefore its Shareholders], ignored this point.
I note that they are protected from any claims of professional shortcomings in respect of the Shareholders' interests.
Who ever heard of a bidding Company offering its final bid with its first opening salvo ? This tells me they will pay more if they have to, which will make a mockery of Deloitte's "fair valuation". I imagine Yanzhou is relying heavily on the Directors' recommended acceptance, to pull it off at the first shot?
Deloitte also tries to justify the valuation by pointing out that there have been no counter offers. It is self-evident that none will emerge until the FIRB has cleared, or thrown out the Yanzhou offer. Therefore I maintain this could mislead Shareholders into the belief that this is evidence the offer fully values our Company.
If the FIRB should decide a foreign bid is not in Australia's interest, this precludes many other Parties, and narrows the field considerably. But no Australian Company would be so foolish as to mount a counter bid, until the minefield is cleared.
Trying to pull the wool in this manner shows little respect for our Shareholders' intelligence to which Deloitte is appealing, and incidentally for which we, the Shareholders are paying !!
Of course Deloitte had to decide Yanzhou's was a fair offer, because "he who pays the piper calls the tune".This was therefore a foregone conclusion.
Who ever heard of an " Independent Expert" paid by the Company being bid for, deciding a bid was too low, and certainly one has never concluded an offer was too high !!
To say the bid was too low when the Directors have already recommended it, would make the Directors appear somewhat incompetent, so we can conclude that the Fee of $200,000 was wasted, even if it was mandatory to go through this charade.
The Directors recommended the bid as "fair" before their "Independent Expert" had given its opinion !! Is this meant to imply transparent market democracy?
To suggest any "Independent Expert" is independent in this context, is risible.
The ASX and or the FIRB should establish a panel of Mining Experts to deal with situations like this, and whoever is chosen, it should be an independent choice, made by neither Party involved in the Bid. The costs should be borne equally by both Parties.This would make it genuinely independent and not the fait accompli which has been put to Shareholders today.
The argument that you, the Directors have endorsed the offer and therefore adds weight to it being a fair bid, could be riddled with holes.
Your motivations to accept, may be very different from the ordinary Shareholder, who is looking for full value for his/her investment, if it is to be snatched away and replaced with cash, which will mean tax has to be paid as well.
For this reason, many would prefer a 100% share offer from BHP.
The Directors [and any supporting major shareholders] are already fabulously wealthy, and as far as I know no details of the ongoing Terms of Service have been released, if the offer is successful. Therefore, there could be many reasons for recommending acceptance beyond the share valuation. I am not saying there are other considerations, merely it is a possibility with any takeover situation.
For the Directors, the offer is not just limited to the value of the Share offer, hence you have a different agenda from the Shareholders.
I am sure everything you have done is by the letter of the law as laid down by the ASX, and any other Regulatory Bodies.
I believe wholeheartedly that you have earned the wealth you have created, and the benefits which have therefore accrued to your Shareholders. You have grown Felix into a Company of which we are all very proud , which makes it all the more surprising that you should recommend the offer, at a price so far below that suggested by the Professional Mining Commentators.
Let me put a scenario to you.
What would be your response to the bid if you and all the Directors were in their 30s, with only limited personal Shareholdings and few other assets?
My bet is that you would all be saying "This bid is entirely inadequate. Please read our summary of the potential of the Company in the coming years, as set out in the Annual Report, and you will understand why we must be allowed to grow the Company and Shareholder value, as we have proved we can do to date. The best is yet to come !!
That is what Yanzhou believes !!
Sincerely,
"Quillan"
