why would arrow/shell risk half a billion plus dollars on taking and unproved up BOW out when there are other minnows who could fit the bill down the track. There is no rush for the supply at the minute, no rush at all.
possible answers 1. By approaching the bid as they have, they have obtained access to info that confirms the flow rates will improve and the 3p 2p targets will be met. Ahh I hear you say, why only a 4c premium on the indicative bid? well why advertise to the world that BOW's prognostications have been correct. Lets leave people in the dark by adding a small premium of 4c. We have the info, the rest of the market don't and our bid is structured to keep that little secret held as tightly as commercially possible
2. Control supply and increase the market price for their existing train. Nah, though prices will trend up as the market predicts there are too many commpetitors to make the 500 million dollar supply control investment economical. In the medium term they would be lucky to get their money back.
3. Expand by swallowing up potential competitors. Nah, bow have only ever stated they would be a supplier, not a manufacturer so no competition there.
4. There are hidden jewels in BOW that the market hasnt yet heard of. Could be! remember there is a small but ever increasing in value holding in sxy, a power plant and plenty of cash amongst others items that are in play here. Cant wait to see the detail of the valuation with these little low hanging fruits
I could go on with a few other machevaliean theories but will leave it at that for now. For me, the answer is in number 1. AOE/Shell know it and they are taking advantage of the market downturn and have used their predators such as BG to shortsell and run a low ball taker bid in order to get the supply for the third train and the rest of the goodies in play, whilst bow was recovering from unforseen delays and whilst their competitors wern't watching. in short bow were ripe for a predator such as shell to take them out cheaply
Whether there is another bid or not is problematic and though I feel it,i cant say it with certainty. The reasons I am seeing posted for the nay sayers on another bid discounts the fact that this is quite an investment Shell/AOE are making and well run companies dont just throw that sort of money around willy nilly. For goodness sakes their board and shareholders would linch them.
Yep there is more to this than meets the eye. sitting patiently awaiting real information to come to hand. At the moment we have little and there is plenty of water imo to flow under the bridge between now and the eo meeting
BOW Price at posting:
$1.49 Sentiment: Hold Disclosure: Held
