the farm-in fallacy, page-3

Thanks Favre,

A couple of points.

Based on recent experience another company can certainly takeover MEL for less than $280 million.

That is, $178 m multiplied by 1 plus 40% control premium costs $250 million.

My assessment of the boards' posture yesterday and the passing of Resolution 6 says to me they'll accept a bid between 75 and 80 cents.

Put yourself in Glenda Mc's Pradas. Less than 6 months ago her 11 million shares were worth approximately $2.5 million at say 23 cents. That's down from roughly 45 cents or approx $5 million.

When you see your wealth diminish like that it frays the nerves. At a bid of 75 cents, i.e. $8.5 million for her shares, she'll be charging for the exits like Seinfelds' George Costanza when the fire alarm goes off.

Further, the bidder can takeover the company and re-employ key personnel and consultants like David Johnson. The likely bidder/s will be an oil & gas major/s with their own deep technical resources.

I think your view is the ideal result for MEL.

Can MEL strike a farm in deal for the conventional resources only? I assume they've tried.