re: Ann: PES: AOE Increased Unconditional Off... From the SMH...

re: Ann: PES: AOE Increased Unconditional Off... From the SMH website:

NECESSITY is the mother of all invention. And with not many deals around, bankers have to make a few extra bucks whenever the train stops.

So we were taken by the ingenuity contained in the fine print in Arrow Energy's opening gambit for Pure Energy. Turns out that there's not just one break fee - but two.

The first is pretty much bog standard. If things go pear-shaped, Pure has to cough up $6.7 million. But the second one poses a conundrum for Pure's independent directors. Turns out that Pure will have to pay the Shell-backed Arrow a $2 million break fee if the directors withdraw their recommendation for the deal.

Did we mention that the directors have, in fact, recommended the deal - in the absence of a higher offer?

And wouldn't you know it, BG has ridden over the horizon to make an offer of its own.

Pure's directors are "reviewing" BG's offer - with some help from their "financial and legal advisers". Gosh, how do you spell "fiduciary duties" again?

Still, there's nothing like the threat of a $2 million bill to focus the mind. Lucky Arrow upped its bid last night. Should ease any concerns. At least until BG comes back.