takeover, page-83

Lol

I'd be happy to wait a few months for a bid at $8...

I'd be surprised (but happy) if anything much over $4.75 was offered. I don't see an auction taking place, though. If a counter-bid is put in, I would expect it to be designed to stifle any possible response from Baytex who have marked out a 17% accretion to Funds from Operations per share from the acquisition of AUT at the price offered. That figure would be damaged if they have to issue more shares to fund an increased offer and they will have to win over their own shareholders in order to issue the shares in the placement.

That said, however, because of the current high rating given by the TSX to Baytex, an increased offer of $4.75 funded wholly by shares placed would only increase the (increased) issued share capital by about 5%, so the figure for accretion would still be in double digits.

If MRO came swinging in with a bid at $4.75, Baytex could still trump that at $5.

As it is, Baytex's bid places poor value on MRO's EFS reserves and no response from MRO might be seen as tacit acceptance of that valuation.