Hi Drillrigger, We have until 27th of August to decide to accept...

Hi Drillrigger,

We have until 27th of August to decide to accept the DLS offer, currently the superior one. I will wait and see what pans out, as there is no harm in waiting. And, as you suggest, and today's announcement might be part of Magnum's strategy to shake loose some more stock on-market before revising the offer (currently far inferior to DLS's at the moment).  

While it is possible that Magnum will revise/improve their offer, I think it is unlikely, at least in the short term. Firstly, the Takeover Panel ordered, "Mrs Hatziladas, Eye Investment, Mr Guglielmo and Mr Shaw’s acceptances of Drillsearch’s offer are reversed and they must wait 14 days from the release of Drillsearch’s supplementary bidder’s statement before deciding whether to accept Drillsearch’s offer". This means that all that stock will go straight back to DLS in a few days, and Magnum's brief window of being able to gain a majority position in AQO will have closed. Also, if Magnum turn around and change their offer in the next couple of days, the Takeover Panel will be none to pleased, as one might argued that Magnum released a misleading statement to scare people into selling on market. Finally, if this is part of some grand strategy, it requires that NSE to have been colluding with Magnum when making their decision to delay the Cooper seismic, which is the justification for today's announcement by Magnum. Only by NSE reversing its decision can Magnum changes its own decision immediately without provoking the ire of the Takeovers Panel.

Regrettably, I think the simplest answer is most likely correct: a falling share price has seen Magnum directors in the States asking some hard questions about the use of scarce funds. Also, with a falling share price, Magnum might be concerned about rolling over existing debts, making it far less attractive to raise additional finance to fund an non-producing asset acquisition halfway around the world. This whole affair has made Magnum look like a headless chicken, from the initial decision to bypass a direct investment in AQO, to investing in NSE (who subsequently put a spanner in the works), to being blindsided by the DLS bid, and, finally, hauling AQO/DLS before the Takeover Panels, getting acceptances reversed and then doing nothing to ensure their bid had any chance of being successful. A complete, incompetent mess.