reject any offer under $1, page-67

now awe are saying their bid is fair and compelling

ASX Announcement
June 3, 2010
AELs 40 CENT CASH OFFER FOR ADELPHI IS FAIR AND COMPELLING
ARC Energy Limiteds (AEL) $0.40/share offer for shares of Adelphi Energy Limited (Adelphi) is fair and represents a compelling offer for Adelphi shareholders for a number of reasons.
AEL notes the release of Adelphis Targets Statement (including an Independent Expert Report and Technical Expert Report (IER)), on Monday 31 May 2010. While the Directors of Adelphi have unanimously recommended that shareholders reject AELs offer and Adelphis IER concludes the offer is neither fair nor reasonable, AEL disagrees and notes that a number of points in the Targets Statement and IER support AELs view that its offer is a compelling proposition for Adelphi shareholders.
For the reasons below, and those described in the Bidders Statement, AEL urges Adelphi shareholders to accept this compelling offer.
1. Offer is within the high-low range in the IER (the IER Range)1: AELs 40 cent offer is at an 82% premium to the 22 cent low case in the IER Range. Additionally, Adelphis board recently issued shares at 25 cents which supports the low case in the IER Range;
2. IER Range not sufficiently risked: the IER Range is not sufficiently risked as it imputes a level of certainty to the Sugarloaf resource base as if they were all reserves. In addition, the Targets Statement identifies 18 main risks associated with an investment in Adelphi;
Given the stage of development of the Sugarloaf asset, the reserves assessed by [the technical expert] comprise a relatively small proportion of assessed level of resources (Adelphis IER page 22)
3. Adelphi has significant funding needs going forward: the Technical Expert notes that funding for over 200 wells will be required over time. Adelphis share is estimated by the Independent Expert at US$21 million for approximately 30 wells over the next 2-3 years, compared to Adelphi only having sufficient funds for the next 9 months;
As the Sugarloaf asset is developed, Adelphi is likely to need to raise additional capital to supplement its existing cash balances. This would require additional investment by existing shareholders or dilution of their existing interests. (Adelphis IER page 31)
1 Adelphis IER states the Independent Expert assessed the low, best estimate and high values for an Adelphi ordinary share on a fully diluted controlling interest basis to be $0.22, $0.61 and $1.10 respectively. However, it also states these amounts do not represent our current fair market valuation range for Adelphi shares, but represent a range of potential values applying a set of industry accepted resource estimates. The Independent Expert concluded that its preferred market value of each Adelphi share is $0.61. Adelphi shareholders can obtain a copy of the Targets Statement and IER from www.adelphienergy.com.au

4. Risk of lower Adelphi trading price when bid lapses: Adelphis Targets Statement acknowledges that when AELs offer expires there is the risk that Adelphis share price will fall;
It is possible that when AELs Offer expires, there may be a reduction in the market price for Adelphi Shares (Adelphi Board, Section 5.7 - Risks in relation to AELs Offer)
5. No rival bidder exists: Adelphis Targets Statement confirms that no rival bidder has emerged since AELs offer was announced. Accordingly, AELs offer is the only offer available to Adelphi shareholders.
We have been advised by the directors of Adelphi that there have been no recent approaches from other parties interested in acquiring a controlling interest in Adelphi which were of sufficient merit that the board believed should be pursued (Adelphis IER page 32)
The quotes above from the Targets Statement and IER outline some of the risks associated with an investment in Adelphi going forward and also the potential implications following the expiry of AELs offer for Adelphi.
Additionally, Adelphi shareholders should consider the compelling aspects of the AEL offer. As stated in AELs Bidders Statement:
i. AELs offer is priced at a 60% premium to the 25 cent placement price and a 43.3% premium to the 1-month VWAP (prior to the announcement of the offer);
ii. AELs existing 33.79% stake in Adelphi precludes any other party from acquiring 100% of Adelphi without AELs support; and
iii. AELs offer provides the certainty of cash (as acknowledged in Adelphis IER), is unconditional and you can sell your Adelphi shares immediately.
AEL recommends Adelphi shareholders read this announcement in conjunction with the information set out in AEL's Bidder's Statement and Adelphi's Targets Statement (which includes the IER) when deciding whether or not to accept AEL's offer.
AELs offer is scheduled to close on 9 July 2010.
If you have any questions in relation to AEL's Offer, please contact the AEL Offer Information Line on 1300 086 730 within Australia or +61 3 9415 4198 outside Australia.
For further information please see our website www.awexplore.com or contact:





lol

what i gather they are suggesting is that rather that sell on market at .42, they want me to sell only to them at .40

hmmmmmm

strange response..

how compelling is that idea???