Hi Travted2000, If (its a big if) they can buyback 10% of the shares then OCJ's percentage ownership will increase a couple of percent assuming they do not sell into the buyback. They hold 21.98% from my understanding so this could potentially go to 24.42%. They will be within the 3% creep rules so no issues should arise in my view. As part of the undertaking with the Takeover Panel TIO cannot increase their vote or 55.56% holding as a result of the buyback. In fact they must offer for sale for up to 18 months all shares they hold in excess of the 55.56% due to the buyback. So whilst they could in theory be holding 61.73% if a 10% buyback is successful, they must reduce to 55.56% by offering the excess for sale. It is silent on the price they must offer them at but I would think 7.5c per share is the starting point. So if FMS can somehow buyback 337 million shares (10%) as you say, TIO are to then list approx. 187m shares for sale on whatever platform they come up with. If we cannot buy them at 7.5c per share from TIO in the designated period (assuming nobody else bought them of course) then they would in my opinion be in breach of the undertaking with T/O Panel. I wonder if they have any friends lined up to buy the excess ?
Please note that TIO can still accumulate these shares if nobody acquires them in the meantime, at a rate of 3% per each 6 months from the completion of the buyback......so within 12 months they could potentially be at 61.56%. Can you see why they still want to do a buyback ?
I don't like this deal much better than the old one but it does give people certainty of the 7.5c price if they want to participate in the buyback.
I have a major issue with any Director taking out a loan to buyback shares in a company that does not generate $1 of revenue. Amateur To then borrow these funds plus working capital, accruing interest for 3 years may very well put FMS in a perilous financial position, causing the loan to go into default. Irresponsible !
I trust they have an excellent Directors Insurance policy and the working capital loan amount will fund the ongoing premiums.
FMS United or OCJ - given the FMS Board will call a new EGM, any thoughts on putting to the EGM a motion asking for the removal of every individual Director ? Same for some New Director Nominations ? Perhaps a Special Resolution motion to the question/cancellation of the Delisting and Buyback ? I am not a legal eagle but that could be very interesting.... just thinking aloud. Does a Special Resolution vote have to be the domain of Directors ? any resolutions need to find their way to that EGM agenda.
All of the above is my opinion only (not advice) and I welcome any other opinions. I have not checked the 337m figure quoted by travted2000 but it sounds about right. As always DYOR and perhaps a legal eagle can make some comment on the EGM resolutions .
