Reworking my earlier numbers and focussing on the cash.DataATCO...

Reworking my earlier numbers and focussing on the cash.

Data

ATCO paying ~ A$1 billion (including transaction cost)(A)

WAGN debt ~$644 mill (A)

$80m SOLA repayment debt has been repaid as part of the ATCO/DUET deal( ASX 7 July) - but not sure if this comes off corp debt or where it sits?

DUET pay to ATCO $42.5 mill.

corporate debt of ~ $518 mill

Tasmanian Gas Pipeline Merrill Lynch values at $342 million

Sellings costs $90 mill (estimate)

Analysis of cash

ex ATCO $1 bill - $644m = $356m

plus Tas Gas $342 mill = $698 mill

less $90 mill costs = $608 mill

less $518 mill corp debt = $90 mill


Unknowns - potential upsides

Where DUET's $42.5 mill sits in terms of ATCO's offer?

Where the $80 mill SOLA sits

$90 mill of costs valid, low?

Assessment

From above $90 mill (~ 12 c / BEPPA) seems the reasonable minimum to BEPPAs but maybe $132.5 mill

Compare to GS 10/2009 "expert" assessment of $48 to $148 mill less transaction costs.

Wait on, this is the same expert that valued Tas Gas at $225 to $235 mill that we now see ML value at $342 mill?

Would seem GS values need to be significantly upped to recognise improved market conditions and in addition the WAGN extra revenues need to be factored in.

Based on the above analysis these improvements do not appear to have been realised in the offers?

Will need to wait to see the detail but I would hope there are independent audit and probity reports that accompany any proposal to BEPPA holders to make sure we received value.


References

(A)(http://www.marketwatch.com/story/atco-signs-agreement-to-acquire-western-australia-gas-networks-2011-07-07?reflink=MW_news_stmp