bow takeover, page-53

"I am starting to think that Alley and friends are actually the good guys, with whom ESG have been working. And it is ORG (and BG) are the ones who missed out on a musical chair.

What do you think Alley?"

LOL..... it took you a while Yaq but the main thing is you are now seeing the light through all the smoke and mirror tricks thrown up by Donnie Brasco's mob(are they real or imaginary.... who knows?).

It seems ESG did prefer the devil it knew(STO) against the unknowns yet to emerge from behind grassy knolls. Time was against ESG continuing to go it alone, particularly with LNGN as the designated major project preference. Time, logistics and the financial oomph needed were ultimately too big a hurdle...... especially given the ongoing NSW political malaise.

Let's go back to your previous challenge and my response

I believe my scenario is in effect panning out...... with a couple of major twists. STO and ESG are not directly joining forces, nor is STO strictly taking over ESG. The Scheme of Arrangement is negating the chances of a 'real takeover premium'. It is not hostile, as ESG have unanimously recommended the deal. In essence the ESG Board is saying to shareholders "our existing vehicle is not powerful enough to go the distance, so let's hitch a ride on the bigger, stronger STO-mobile. You may not get the massive short-term killing usually associated with a takeover but, in the longer run, you will be fully rewarded for your patience".

I know STO has it's knockers on this board but it has shown astuteness in structuring this SOA. Firstly, by substituting ESG gas to divert otherwise NSW-committed Cooper production to GLNG. This is very smart politically and economically for STO. Secondly, partnering up with TRU Energy is a very clever move also.

Why is it not dissimilar to my earlier scenario? Well ESG still becomes the sole vehicle for developing all CSG interests previously held by STO and ESG. GLNG indirectly gets more feed for Train 2 and towards a Train 3. The NSW Government has a much greater incentive now to get behind ESG to help drag it's economy out of the mire. The only difference is we cannot hold share directly in ESG anymore, but can continue the ride via STO shares..... or bail out completely.

That's it in an nutshell Yaq. Only problem is I don't know how to play it. Hence my sentiment has changed to 'none'. I still hold some ESG directly but have switched back to STO the holding I previously switched from STO to ESG when the SOA was first announced. I guess I'm as confused as anyone on where it goes from here. The 14.7 ESG scrip swap for one STO share appears locked in. Why would STO pay more if it can steal ESG on that basis? I'm looking for you and/or others to convince me to the contrary but so far no-one appears any the wiser. So let's keep racking our brains until we come up with something.