Frankly, if the AUT board is stupid enough to waste time & money on such a foolish endeavour I will sell.
Think about it.
If it's a cash offer - price? Say 24 cents. Cost (excluding advisers) say A$37m. So what will they use to pay for the expensive drilling on Longhorn (WI 25%) and Ipanema (WI 30%). And Kowalik and further drilling on S/L will be more expensive (16.25%).
If it's a share offer, the price payable will reflect a bid premium but the consideration shares will not even reflect fair value of AUT's assets.
What is the benefit to AUT shareholders, may I ask?
As to AWE: ADI was a special situation. They had an investment in an associate that did nothing for their balance sheet. Now they can book ADI's reserves. They started from a 34% platform with little chance of failure.
If they really do want that extra 6.25%, they might hang around until EKA needs cash and build itself a bid platform by mopping up loose shares. There's no rush.
There's a lot of chat and ramping but little explanation of the commercial benefits to either AUT or AWE.
As an AUT shareholder, would you vote for a bid for EKA by AUT if the AUT Board requires shareholder consent?
AUT Price at posting:
80.0¢ Sentiment: LT Buy Disclosure: Held
