If we were to suppose that AUT was targeting TXN. What would you...

If we were to suppose that AUT was targeting TXN. What would you do if you were AUT. You would sit and wait. TXN shares are on a definite downward trend why jump in and the market cap of AUT is rising steadily and could well be much higher in the next couple of months. Earlier this week it was suggested that a 1 for 3 share swap would provide an excellent offer. Indeed it would.

Dare I say AUT could offer 1 for 5 now. At those levels the share offer does not even need AUT shareholder approval.

As for why the sale hasn't been done. It is simply the land rush for the moment is over. Everyone including all of txn neighbours have huge land areas on the books. Swift Energy 70,000 acres, Chesapeake was somewhere near 250,000, Talisman Energy 80,000, Murphy Oil 201,000. The capital budgets for these companies is huge. Talisman has stated 800 wells @ 10 million or $8bn.

Here is one way of looking at this. The guests are at a sumptuous banquet and have finished desert when someone comes over and says hey I have this lovely cake who wants to pay full price. The answer is no one. Doesn't mean the cake is bad it's all in economics speak a question of marginal propensity to consume. When you are starving a kingdom for the cake, hungry maybe $50, after a big feed 10 cents. Same cake same buyer. TXN has found out that all of it's potential near buyers have a belly full.

TXN only hope to find a buyer is from a company that wants to be in EFS from scratch but our land holdings are only small so you need to find a mid cap company. The ability of the company to start a bidding war is very low atm.

This is not to say it can't be done it will be a very hard work and we do risk an EKA scenario. All I hope for is that AUT provides a share offer as a deal sweetner.

cheers Icharus