If you hold over 10% of a company that is subject to a takeover then you have what is termed a 'blocking stake'.
I had experience of it when Roma Petroleum ( RPM ) were taken over by QGC ( now British Gas ). QGC offered a low ball price which the RPM Directors stupidly accepted. BOW held a sizeable portion but their percentage was under 10%. So BOW got together with a few other RPM shareholders ( including myself ) and formed a blocking stake which totalled over 10% .
Accordingly it gave BOW an opportunity to mount a counter bid but unfortunately Hubbard and Churcher sold out their RPM and QGC took full control.
So, by purchasing 10.18% of ITC, VPE has aquired a blocking stake should some other predator ( e.g Santos ) knock on ITC's door with a low ball bid.
In the meantime VPE could look at a cash and script bid for ITC or wait a while and pay a bit extra when they have the cash after selling off their proven up CSG assets ( and that could be another 12 months ).
Doesn't really worry me. I hold both VPE and ITC and sooner or later we are going to be pumping a lot of oil.
This game is all about identifying a good story and having huge patience.
Jmho.
ITC Price at posting:
5.9¢ Sentiment: Buy Disclosure: Held
