I know this is lazy research but I thought I'd ask chatGPT the...

I know this is lazy research but I thought I'd ask chatGPT the following question...

Do companies sometimes divest non-essential units prior to being taken over?

Answer: Yes, companies often divest non-essential or underperforming business units prior to being taken over, and this is a strategic move known as "pre-sale divestiture" or "asset pruning". By selling off non-core or low-performing assets, companies can focus on their main strengths and increase their appeal to potential buyers. This helps streamline operations, boost financial performance, and sometimes unlock capital that can improve the company's balance sheet. These divestitures can also reduce regulatory or anti-trust concerns, as it allows the acquirer to take on only the parts of the business that align with their strategy. In some cases, shedding non-essential units also helps prevent the acquiring company from incurring extra integration costs or managing assets that don't align with their core business.

Follow-up question...

How often does this happen prior to a company being taken over?

Answer: Pre-sale divestitures are fairly common, particularly in large deals or when companies are actively preparing for acquisition. A study by Deloitte found that nearly 50% of companies considering divestiture do so to improve the value or attractiveness of the core business before a sale. While there isn't an exact percentage for every takeover, it's a common enough strategy that it's considered a standard part of M&A preparation, especially in complex or hi-value deals where the focus is on unlocking the most shareholder value.

So, make of that what you will, but clearly more evidence the company is readying itself for the inevitable t/o, imo. Happy also that the assets in question will be drilled sooner rather than later, and I also note a non-cash impairment of $17million to be added to accumulated losses I presume.