At this stage, I think each holder will need to do what they think best suits their circumstances. I don't begrudge any shareholder selling because it's uncertain times. We all have different tolerances to the risks confronting us. For what it's worth, I'm thinking I'll hold until the end, even if the 90% is reached and I'm forced to take WNI scrip. The BRM notice alludes to different tax treatment if forced to sell - although I'm not sure what it is.
Basically, we either get WNI shares (accepting offer or holding right to the end); get cash (WNI offers this or sell on market) or a combination of both.
I'm pragmatic and will be adjusting as I see it. I won't be selling for cash for anything less than $6.50. This amount sets me up for life although I had always wanted to hold BRM until production, which probably would have been a SP around $10. Of course, this was contingent on BRM getting all their ducks in line including the rail access duck! They didn't manage it, so the SP was likely to stay stuck around the $5-$6 mark until something definitive happened.
WNI will probably get the missing rail component which theoretically means its SP price should appreciate to reflect this massive derisk. What the SP does once they're in production is a different matter because it's based on their profits.
If the BRM hits $6.50 I might sell a few to cover my investment, but the vast majority of my holding I'll keep until the end. I'm prepared to take the WNI scrip at the death if they get the 90% and hold until close to production.
I figure the Chinese will not want this takeover to go pear shaped before they achieve their production goal or takeover of other more significant miners. Screwing Australian shareholders too early will result in the introduction of new regulations that will restrict them or delay them until they figure out other loopholes.
I figure that WNI's share price could get to 40cents a lot easier than BRM could have to $12, after all, there's a greater chance of getting more punter on board - even if most don't understand the market capital value of companies.
WNI's challenge once their shares are on market is to make them attractive to buyers. How they do this will be interesting. We'll find out later this month once accepting shareholders start trading out.
I imagine that once WNI make a rail announcement, they'll spruik their shares for all their worth, and it's rise will come from China and Hong Kong.
I have an American friend who has purchased Chinese shares for years and he found that they've appreciated very well.
I might be totally misguided in my thinking, but I just can't see the Chinese allowing this takeover to turn out poorly for Australian holders because of the long term consequences to their ambitions.
BRM Price at posting:
$4.48 Sentiment: None Disclosure: Held
