Andrew Forrest’s claim that he’s wasn’t interested in a buyout of Regis Resources when he raided the register late last week has been met with scepticism.
If he was not interested in launching a takeover, then why did he only want to buy the shares if he could get 15 per cent of the stock, taking his holding to 19.9 per cent? A shareholder is unable to own more than 19.9 per cent without launching a bid for a company.
Forrest was in the market on Thursday night for 113 million Regis shares at $1.48 each – a 13.8 per cent premium to their last close – through investment bank Barrenjoey. On Friday investors were told that the deal was off after Forrest only gained agreement for the acquisition of 12 per cent of the stock.
Still, some believe it is a positive sign for gold, showing that there are buyers for assets at the current cheap prices.
On Friday, the spot price of gold was $US1805 ($2620) per ounce. Regis’s operating costs are about $1500 per ounce, say analysts, so currently it is making about $1000 in profit for every ounce it produces.
Analysts believe stocks like Regis have been oversold and Forrest’s last move shows they are attractive for investors.
The trade unfolded on the last day of the financial year. Perhaps Forrest’s hope was that investors would offload shares to secure a small gain to round off their 2022 financial year.
Other gold miners appreciate the discounts that they are trading at, with Evolution Mining boss Jake Klein recently taking the opportunity to buy back $180m of stock. While companies may look attractive as takeover targets, North American gold companies that are often buyers of their Australian rivals are also trading at discounted prices, so that leaves private investors or other Australian outfits.
Forrest’s Wyloo previously acquired a shareholding in Regis and Barrenjoey told investors last week it wanted to acquire further shares, which aligned with its investment strategy in this sector.
A term sheet sent to investors said Wyloo had no current intention to launch a takeover.
Forrest has been acquisitive of late, amassing a 17 per cent stake in beauty products company BWX, a 17.4 per cent piece of AACo and a stake in Bega Cheese.
Regis Resources is an ASX-listed gold producer and explorer based in Subiaco, WA.
Its main assets are the fully owned Duketon Gold Project and a 30 per cent share in the Tropicana Gold Mine.
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