AMA reorganization, page-24

I notice that STO has rejected a takeover offer from venture capitalists, on several grounds:

Not good value for shareholders
Implied premium in the bid being steadily eroded by commodity price rises
Unfair to shareholders in that only the largest remain invested in the business and gain from upside
Complicated takeover structure
Target obliged to help the bidder organize its funding so that the bid can go ahead
Target has a great business model which is turning the company around
Target has low costs and great revenue streams so it is a better deal for shareholders if they just keep doing what they do.

I see some parallels in the AMA takeover situation, the difference being that the AMA directors have unanimously embraced the takeover bid whereas the STO directors have unanimously rejected it.

With STO, the bidders can't get the funding they need to buy STO outright so they want STO to help them raise the money, in part by by hedging future production.

With AMA, the bidders won't pay for the whole company but instead want AMA to shed the unwanted parts before a buyout goes ahead.

In each case, you have venture capitalists trying to make money off something they consider to be doing well and have greater prospects. In each case, the losers potentially would be the ordinary shareholders who are (AMA) or would have been (STO) expected to roll with the offer and accept low-ball bids with plenty of tricky conditions.

My belief is that the Blackstone bid for AMA must be amended so that a premium to fair value is evident on an outright purchase of the whole of AMA. Otherwise, it seems to me that ordinary shareholders will be denied the opportunity of profiting from AMA's dominant market position going forward, just as STO's shareholders would have been denied a similar opportunity in that company's future prospects.