Wah Nam International (WNI)

[Huang Chung]

This is the company that is looking to take over Brockman and FerrAus.

Company lists on the ASX on Tuesday (noon Sydney time).

Take a look at the distribution of shares:

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01140320

Only around 15% are outside the top 20. I would think a lot of these will be punters offered shares (at 20c a piece) just to achieve the necessary spread of shareholders for listing (I'm one).

Could be some interesting trading come Monday. Don't know if these will be in hot demand, or just seen as some foreign curiosity....

[Huang Chung]

Still holding, and for the most part, been wondering why :(.

However, taken at face value, WNI now hold 38% of Brockman, so things seem to be moving forward somewhat. I say 'at face value', because there are apparently various 'associates' of WNI on the BRM share register, and it seems a moot point whether these interests will be allowed to be transferred to WNI.

Still, if they can gain control, it could be interesting.

One to watch, but very opaque as to what's happening, what will be allowed to happen, and what it all means in the final wash up.

[Huang Chung]

Things are looking somewhat brighter on the Brockman takeover front. Wah Nam's bid has gone unconditional, and that seems to have pushed a few BRM shareholders into accepting the bid. Now holding 45.39% of BRM.

Still, its a bold and crafty endeavour by Wah Nam, that the regulator could still knock the takeover on the head. My feeling is that WNI will settle for control of BRM, and not persue a full takeover. Their ambition is to combine BRM and FRS (both members of the NWIOA) into an Iron Ore powerhouse. I like their thinking....

I've recently been buying more Wah Nam oppies...just as a punt.

[drillfix]

Hi HC,

After posting to myself in the CGV thread I couldnt help but noticing that your doing the same here :P

Nice posts and interesting story there HC. What code and ex date and strike price are the options?

Dont know why a company would continue to pursue if they were going to be knocked back. Do you reckon they will manage to get it through ok?

[Huang Chung]

We'll, I'm more hopeful this week than I have been in the past Drilly.

Still, BRM have gone (unsuccessfully) to the Takeovers Panel once, and I think the bid has been referred to the ASX/ASIC. I think Wah Nam have been quite crafty, and have almost stolen BRM for little cost. My fear is that they may have been a little too crafty, and a regulator will tear the bid down.

Time will tell I guess.

[drillfix]

Well, all I can say is good luck with this one HC, hope you land on the right foot and get rewarded accordingly.

[Huang Chung]

Wah Nam moved to 51.99% of BRM today. Threat of regulatory intervention, whilst still there, must have diminished somewhat.

Now also moving up on the the FRS register. FRS Board seems a little more willing to deal, and today's events should have increased the chances of WNI and FRS boards sitting down and breaking bread.

BRM and FRS are both members of the NWIOA.

Could be an iron ore powerhouse in the making here.....

[drillfix]

Wah Nam moved to 51.99% of BRM today. Threat of regulatory intervention, whilst still there, must have diminished somewhat.

Now also moving up on the the FRS register. FRS Board seems a little more willing to deal, and today's events should have increased the chances of WNI and FRS boards sitting down and breaking bread.

BRM and FRS are both members of the NWIOA.

Could be an iron ore powerhouse in the making here.....

Are you calling out a buy here HC ??

I hate it when I miss out on some of the calls you have made so would be interested in hearing how you actually feel this will play out, or is much of it priced in already in any way? or how much further would you estimate any rise to reach approximately?

Cheers for now :)

[Huang Chung]

Drilly, it's really hard to tell.

My guess is that in the short term, say for the next 2 months, WNI and WNIO could get cheaper. Reason is that some BRM shareholders won't want to hold Wah Nam, but like the current arb between the BRM shareprice (around $4.30) and the WNI shareprice (around 19c).....when the deal is 30 WNI shares for each BRM share. So, instead of selling BRM on market, they convert to WNI. When they get their WNI shares, they try to sell, but with no real buy depth, WNI is likely to fall.

I've currently got a bid in on more WNIO, but I'll most likely pull that on Monday, and wait for the dust to settle.

I also think BRM might get trashed next week, as I would imagine many shareholders will now sell on market, not wanting to be minority shareholders. Could actually be a buying opportunity here for a trade.

Longer term, I think WNIO could be interesting, if Wah Nam has success in bringing FRS into the fold, and either build a rail line with Chinese backing, or do a deal with FMG for rail access. With BRM and FRS both being members of NWIOA, I'd say port access is looking pretty good.

The HC conspiracy theorists have Wah Nam operating as a front for some other Chinese enterprise, or the Chinese Government itself. They see WNI delisting from the ASX once both BRM and FRS are in the bag (WNI's principal listing is in Hong Kong). Something to consider, but personally not too concerned.