merger details out, page-47

I am a holder of SEA and TXN shares (about equal value), and must say I'm surprised that TXN accepted this deal. I could imagine 3-for-2 shares plus Talon, but this seems to be a steal for SEA. I don't think this deal satisfies minimal due diligence by TXN's board, but I could be wrong.

The good news for TXN holders is that the deal is SEA shares, not cash. I know, this isn't the same as a fully valued cash payment. However, I agree with others that the deal will push SEA shares up for two reasons: (a) SEA acquires an asset for much less than its full value and (b) SEA will create realized (read: cash flow) value from EFS fairly quickly. the potential short-term downside would be sell-off of SEA shares by TXN shareholders. But consider this: It's better that SEA is buying TXN than vice versa!

It's a fools game to predict share prices on the ASX, but I'll play a fool by suggesting SEA will rise 20 cents by Feb13 just on this deal and related production. I think SEA's shares may rise further on its other projects.

What about Talon? I believe (OK, just hope) that current work on Roundhouse will demonstrate reserves value by Feb13. Also, with EFS gone, Talon's success will more clearly be linked to mgt talents, not existing land value. But predicting Talon's settled-in share price? Hey, I'm not that much of a fool!