Its widely tipped that the cost of power to homes will raised significantly in 2009. This will be of great benefit for BBP, it would make a lot of sense to buy them up at distressed prices (just like BHP did with WMC), that’s why you are seeing potentially several bidders for their assets.
This will be a great buy for companies who have the money (mainly AGL and Origin). Although BBP could not possibly survive on its own as the interest cost is too high, if you can get someone with sufficient capital and pay off their debts, we are looking at a very good yield, and since energy will always be on demand and in short supply the downside is limited.
A bidding war could be interesting, any one have a NTA on BBP? Their all time high was about $3.5, they are down about 98% to 11 cents with a MC of $70m. If the bidders is willing to take over the 3.3+ billion dollars worth of debt then I really done see how a few hundred million dollars to pay for the shares will change anything in the long run.
BBP Price at posting:
11.0¢ Sentiment: Hold Disclosure: Held
