It's pretty simple, Buddy. Small oil and gas plays can't easily raise capital in order to fund their ambitions, so a captive pot of cash is very enticing.
Mr Purcell wants the cash to stay within MEL and be subject to the whims of management (him), while the current team wants to play it both ways by investing a portion, ala BYE, and paying a portion out via capital returns and share repurchases.
Monday should be interesting. If Mr Purcell gets enough support to stop the capital return, then a board spill will follow. If he is unsuccessful, then he will either need to make an offer for the whole firm, or play the long game by getting on the board and creeping his share up over time. Regardless, he has invested HIS money in MEL and deserves the opportunity to influence the firm's direction.
Overall, I think both strategies COULD have merit, if the underlying projects are economically viable.
However, I just want my money back. I'll invest in either BYE, MEO or any of the myriad of other opportunities that present themselves if I decide they have merit.
So, hoping for a capital return and then a full and FAIR offer for the balance of the firm (cash backing + value of shell).
As an aside, interesting to see HHY increasing its ownership of MEL while it is also subject to a wind down strategy by Wilson Asset Management.
"Oh, what a tangled web we weave."
MEL Price at posting:
6.3¢ Sentiment: Hold Disclosure: Held
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