Another week, another company on its way out – this time a small-time gold miner Shanta Goldon the receiving end of a 14.85p bid from multinational conglomerate ETC Holdings.
Midas recommended Shanta in 2021, when its shares were worth 8.25p, and revisited the East Africa-based company last autumn, when its shares were worth 10.6p.
ETC’s offer is a juicy premium on both prices and includes a 0.15 cent dividend, bringing the full price to 15 cents. Yet the rationale behind this deal is a sad indictment of the London market.
Shining brightly: the gold price is at a record high and Shanta Gold is in good condition
ETC is led by Ketan Patel, who founded Shanta in 2001 and still sits on the board. Patel believes the gold miner is undervalued in the stock market.
Other directors appear to agree and have recommended the offer, alongside specialist organizations that advise major shareholders on how to vote.
After offering 13.5p for Shanta in December, ETC improved its offer over a week ago. The voting deadline is tomorrow and momentum is gathering in ETC’s favor.
Midas judgment: The gold price is at a record high and Shanta Gold is in good health. The share price does not reflect this and Patel has responded. Should his bid go through, shareholders will secure a tasty spring bonus, but the stock market could lose another strong company. Wake up London!
Traded on: Goal ticker: SHG Contact: shantagold.com