Absolutely. The reserves upgrade makes a nonsense of the offer BUT ESG are obliged to carry on with SANTOS takeover in the absence of a superior proposal.
Think about the other players. Especially after the reserves upgrade comes in, which if doubles, puts the takeover price at only 25 cents a G.J.
The market for the gas has been proven by the fact SANTOS want to take them over.
If I was BG or Origin or even the Japanaese, there is NO WAY I would let a tiny transaction multiple go through without having a bid!
It's worth a shot to offer an all cash offer to shareholders as an alternative to an all scrip offer from SANTOS.
Already SANTOS's price is going down (as you would expect), further diluting the deal.
The curtains have opened, Santos's first low-ball offer is on the table.
The board are keeping a close and friendly relationship with SANTOS even when an alternative bidder comes our way. The ESG board shrugs and says to SANTOS "OMG, what can we do? You have to increase your offer or we are obliged to go with the alternative proposal for all shareholders"
It's subtle, i'll give them that but just as effective!
the start of a bidding war?, page-12
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