puzzle about the bid, page-3

The highest bid is from D&C Pesca, $27.5 millions for SRK's 50% of AF.

The second highest bid is not from Ausinca. Actually the second highest bid is from SRK which is $3.2 millions for 50% of AF.

So, if D&C Pesca fails to finance their bid, SRK would get 100% of AF by paying $3.2 millions. Then roughly, Ausinca would get $1.9 millions for their 30% of AF, and D&C Pesca would get $1.3 millions (if they fail to meet their commitment,D&C Pesca should get some penalty deducted from this amount)

The question is : will D&C Pesca pay to take full control of AF ?

D&C Pesca had plenty of time to workout how much to put on the table. The amount of $27.5 millions did not come from blue sky, D&C Pesca must have some research, evaluation and calculation before presenting the bid of $27.5 millions.

Note that just recently (couple of months ago in 2012) D&C group paid $1.9 millions for 6% of AF (IAC deal in which SRK also got 6% of AF from IAC). By paying $1.9 million to get only 6% of AF, then accepting SRK's bid by selling 50% of AF to SRK for only $3.2 millions, D&C group must be crazy if they do so.

Paying $1.9 million for 6% of AF just couple of months ago, it is quite reasonable for D&C to come up with the figure of $27.5 millions for 50% of AF. From what happened, it looks like D&C Pesca is serious in this business, they would not let AF being taken away from them cheaply.

The above is just some thought based on the information we are told by SRK's management. We have to wait and see what the outcome will be.