Tinpo to acquire Western Prospector: Micro-cap Update

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Tinpo to acquire Western Prospector: Micro-cap Update

7/15/2008 3:47:46 PM | Danny Deadlock

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WNP going private and being taken over would result in 100% gain for Stockhouse readers.

Western Prospector (TSX: V.WNP, Stock Forum, 75 cents – Halted)

www.westernprospector.com

We have been bottom-fishing WNP for months in the 60-cent range and this has been one of my favorite stocks as the value of their cash and uranium was no where near fair value. Even in my update this past Monday on Stockhouse I highlighted the company and discussed these same fundamental values.

Previous research reports on WNP have been archived on our Stockhouse Blog.

As is normally the case... the market was wrong once again. You could barely give this stock away in the 60-cent and 70-cent range for the past six months.

This takeover offer is very fair and is a straight cash deal. The potential existed to see this company worth $2 to $3 in 12 months time, but given these rotten market conditions.... cash is king.

I knew this previous offer by Khan (TSX: T.KRI, Stock Forum) was grossly opportunistic!

Congratulations to those who have bottom-fished this with us and had the patience to ride it out. I know it’s not easy in this market.

WESTERN PROSPECTOR ANNOUNCES C$74 MILLION CASH OFFER BY TINPO HOLDINGS

Western Prospector Group Ltd. and Tinpo Holdings Industrial Company Limited have executed a definitive agreement for Tinpo to acquire all the outstanding common shares of Western for $1.34 per share in cash, valuing Western's equity at approximately $74-million.

The offer represents an 86-per-cent premium to Western's closing price of 72 cents on July 14, 2008, and a 168-per-cent premium to Western's closing price of 50 cents on May 9, 2008, which was the last trading day prior to the unsolicited takeover bid by Khan Resources Inc. The offer also represents a 130-per-cent premium to Khan's bid, which consists of 0.685 of a Khan share for each Western share. Khan's bid currently values Western at 58 cents per Western share, based on Khan's trading price of 85 cents on July 14, 2008. There is no cash component to the Khan bid.

Subject to the terms of the definitive agreement, the offer by Tinpo will be in the form of a takeover bid, whereby a subsidiary of Tinpo will acquire all of Western's outstanding shares. As a result, Western will effectively become a private company.

ABOUT THE AUTHOR

Danny Deadlock

In addition to the editorial published each week on Stockhouse, Danny Deadock offers MicroCap Premium which is published throughout the week by email and includes more in-depth research on stocks in their portfolio, new picks throughout the month, broader market commentary & forecasts, and StreetSignal which tracks picks of the leading penny stock newsletters and combines with Technical Analysis and Insider Trading. Stock picks are typically weighted 80% Canadian / 20% U.S. and cover various sectors. Annual cost is $149 Cdn. For details, please visit our website at www.microcap.com

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