a $25m commitment to lng, page-16

db,

maybe AGL may make a bid for ESG and move forward with the plant.

They need to find some growth to satisfy shareholders after missing out on the NSW privatisation.

Many expect the STO 19.99% stake as a 'blocking' stake. However, the AOE stake in PES was also supposed to be a 'blocking' stake and we know the end result - a bid price that AOE could not match and were forced to accept. Under this scenario, the STO stake could actually be of benefit to ESG shareholders, helping to extract a maximum bid.

There are many players here. BG, Shell may feel they are forced to make a move on ESG ahead of STO as they may value this resource far more?

Also, you may recall that when AOE announced a raising to fund their LNG ambitions (it would have doubled their shares on issue I recall), that was enough for Shell to step in. Sure, you may have a dilutionary effect, however, at the same time, the value of the company would be worth far more given the revenue from LNG becomes a reality. You may just find that the share price actually appreciates post cap raising. Even if it stays the same, you are asking a predator (whether this be STO, Shell, BG, AGL etc) to risk paying $3b if they want this asset.

And finally, I just don't know whether STO are in a position to spend a further $200m on passive investment. So, I would argue that a STO takeover may not be as 'incredible' as you suspect.