If I were in VPE and looking at putting an offer up...
Up till recently markt has valued ITC at approx 33% of VPE's cap. This could provide the basis for a mostly script (amalgamation) offer i.e.
518m shares (VPE) / 0.67 = estimated post amalgamation shares of 773M.
This allows 255M shares to be issued by an amalgamated coy to ITC holders and the 33/67 spilt (ITC/VPE holder ownership) to be maintained post amalgamation.
ITC has 887M shares on issue. 887 / 255M = 3.5. A reasonable fair script offer would therefore be 3.5 ITC shares for 1 new VPE share ()in the amalgamated coy).
Now ITC also has some net cash and other odds and sods, there would be obvious synergies (cash savings and other operational efficiencies) and an additional "control" value released from one coy holding 100% of the western oilfield (especially after recent survey results further support elephant status). ASX trading liquidity would also be improved. Value to sweeten the deal to ES and top 20? say 2c per share.
Assume a share price of 35c VPE and a 5.2 for ITC, then the value of such an offer to ITC holder per share could be 12.5c per share. Plus the knowledge that the new VPE / Senex team will continue to unlock value in the fairway and diversify risk with CSG permits i.e. newly issued shares could well go up further. Questions what premium does this offer were a VPE deal shake out a second bidder???
Zero nominees could be building a stake in anticipation of VPE's move or be a local player wanting into the fairway. That would put alot of pressure on VPE's offer / timing.
Final thought, timing could be v. soon as each day forward from here upward pressure will push ITC's share price as the waters subside and drilling /production recomencement gets closer AND punters think along the above lines.
I think its been said by a respected poster on this board that the new VPE / Senex team will be looking to cut their teeth on an acquisition, ITC as above may work for every one ; )
ITC Price at posting:
5.1¢ Sentiment: Buy Disclosure: Held
