Copper Stike's Geoff Lord, one-time lieutenant of John Elliot and boss of Elders Resources. Photo: Luis Ascui
CHANCES that shareholders in exploration tiddler Copper Strike will get some cash out have receded yet again with the emergence of a ginger group trying to overthrow the board.
Headed by the irrepressible Geoff Lord, (pictured) 0ne-time lieutenant of John Elliott and boss of Elders Resources, the group has yet to say what it wants to change - apart from the make-up of Copper Strike's board.
Lord is accompanied by lawyer Nick Stretch, Kingsgate Consolidated chairman Ross Smyth-Kirk and wealthy Shepparton-based KFC franchisee Chris Retzos and family.
Clearly the would-be board reckons it can find better uses for the $19 million in cash that Copper Strike will have in its bank account shortly, than executive chairman Tom Eadie and his team.
Copper Strike's position is delicately poised after beating off a low-ball offer from Kagara Zinc last year, and then doing a deal with the same company this month to flog off its main asset.
When Kagara's 11¢-a-share offer was pitched late last year, Copper Strike's independent expert, RSM Bird Cameron, came up with a value range from 26¢ to 45¢, and settling on 35¢ a share.
That pretty much killed Kagara's bid, but it retained a 17.5 per cent stake bought from Canadian group Teck.
A few weeks back Copper Strike struck a deal with two Chinese companies that would see them pay close to $6 million for a 20 per cent stake, to fund a feasibility study on its Einasleigh copper project west of Townsville.
That deal, which would have seen the Chinese co-develop the project if all went well, would still produce a 35¢-a-share value for Copper Strike according to RSM Bird Cameron.
Then Kagara came over the top last week, offering $16 million for all of Einasleigh plus the cancellation of its shares in Copper Strike - a deal that Eadie and the board have accepted, although the Chinese groups have until this time next week to respond.
This is where Insider is confused. Having declined to pay more than 11¢ a share for the entire company earlier this year, Kagara is now prepared to pay Copper Strike the equivalent of nearly 15¢ a share for one asset, and give away $3 million of stock.
Even more confusingly, Copper Strike's board, having told shareholders twice in a year that their shares are worth 35 cents each, is sanctioning that deal, even though it leaves the company with a value of slightly less than 19¢ a share. They are only 13.5¢ in the market.
Eadie has promoted a capital return to shareholders in the region of $10 million (about 9¢ a share), once the Kagara deal is done, and already has his eye on an acquisition of $10 million to give Copper Strike a future.
Lord is reportedly not a fan of giving capital back to shareholders. Insider has always felt that capital returns, even though structured as buybacks, are a sign of a board bereft of ideas.
Clearly, though, the disgruntled group has its own ambitions on either how to spend the cash or striking a different deal on Einasleigh.
Trust in a slanging match
CHARTER Hall Office trust's defence against the US hedge fund troika - Orange Capital, Luxor Capital and Point Lobos Capital - was given a shot in the arm yesterday with suggestions that proxy advisory firm ISS/ RiskMetrics was backing the existing management.
While it is still two weeks until unitholders get to vote on who should manage their fund, getting ISS on board might be considered a coup.
Aside from being the responsible entity (manager to the rest of us) of the office fund, the Charter Hall group also owns a direct 13.44 per cent stake in the trust.
The mega-rich shopping centre developer John Gandel owns more than 5.05 per cent and is also supporting current management.
For its part, Orange and its tribe of ''concerned unitholders'' account for 19.9 per cent and are doing the rounds of their US clients to drum up support. They are said to be paying out a hefty fee to engage Bill Moss's consortium to win over the investors here.
Only 13 sleeps until a long slanging match, but deep feeding trough for corporate advisers, is decided.
Don't mention the war
THE statement to investors by Tiger Airways Holdings yesterday about passenger numbers reminded Insider of a hoary old joke about what can be found in both men's trousers and billiard tables - where the explanation is not the first thing that springs to mind.
Tiger's press release noted ''passenger numbers were impacted by the significant disruption to Australian domestic air travel''. Those who, like Insider, jump to conclusions might have thought that was a reference to the Australian air safety authority grounding its domestic fleet until August.
Not so. The hit was actually the same that affected pretty much every other airline in June - ash from Chile's volcano.
Tiger was not grounded until this month, which probably explains why acting chief executive Chin Yau Seng, left it to the last paragraph of the release to mention the war.
Tiger might appear to have got off lightly so far, losing only S20¢ to a low point of $S1.005, but there are more worrying numbers.
More than 270 million shares have changed hands since the grounding - equivalent to virtually all of the ''free'' float in the company. Tiger has only 545 million shares on issue, and 222 million are accounted for by the Singapore Government investment arm Temasek and its associates.
Insider would not be surprised if many of those getting out, aside from short sellers, are the unfortunates that bought most of Ryanair founder Declan Ryan's stock back in February in a placing by Citigroup and Morgan Stanley at about $1.58 a share - investments that are now sadly under water.
Tiger's Tony Davis, parachuted in to sort out the local mess, must be awfully glad he was prescient enough to sell 1 million shares in late May at $1.42 each. Mind you, he still has more than 3 million left.
(The answer to the joke was pockets, of course).
