I just can't see a situation where Harbour have done all this work, have ENN and Hony onside and they don't engage. Previous statements have indicated that they were planning to pursue this as a Scheme, which will require the Buy-in of the STO board. The STO Chairman was pretty clear at the AGM that the rising oil price will add value and by extension, I can see that a sweetened offer will be needed to gain the STO Board support.
Now, Harbour can pursue this through a takeover, but it adds uncertainty and lifts the hurdle for a successful outcome i.e. 90% versus 75%. That adds to the intrigue.
Furthermore, with ENN and Hony now acting in concert with Harbour, it changes the dynamic as these shares may not be able to vote in a Scheme, as they are receiving a benefit which is not available to all shareholders.
Lastly, I don't discount a potential added player to join the chorus here. STO has equity in 3 LNG projects, which will all be spitting out cash at $75 Brent and LNG linked prices. These assets are valuable in the right hands, with the capex largely spent.
So, it will be an interesting few days. APPEA is on this week and all the parties will be in Adelaide at the same time, which may bring forth some progress.
I have my bets in place and I'm happy with the progress on this.
Cheers, AL
STO Price at posting:
$6.32 Sentiment: Buy Disclosure: Held
(20min delay)
