"So, Am I the only one who is scratching my head trying to work out the logic of this takeover strategy? Have I missed a communication from MAY to shareholders outlining the thinking of management??
I too am a long time holder and am sure used to let downs with this company. It always seems to get to the edge of a payday and management get a rush of blood to the head and make unfathomable (at least to me) decisions. I just wish they would focus totally of getting the long promised drills underway in Cuba, making some money out of the Santa Cruz deal and getting into bed with Santos and Total in Nth OZ.
I feel like management are again treating shareholders like pawns to played for their benefit. For the first time in many years I am seriously thinking of bailing. So much promise and so little delivered. I think that perhaps it is time for MAY to be taken over by a company who can realise the potential MAY's assets - the current mob just dont seem capable of doing so. Sorry to rant but my optimism has run out. "
There has been no communication from MAY to shareholders outlining the thinking of management. YET. Obviously, when appropriate, there will be.
Given the HC posts have been all negative so far with most of the speculation that this deal is being done entirely to benefit Andrew Purcell and anything else is just a side issue, i'll have a crack at speculating why they might be doing this.
Small O&G stocks need scale. Combining two companies struggling with low share prices and with a range of assets (MAY's highly prospective high impact free-carried Beehive, low risk production-enhancement Santa Cruz opportunity, and Block 9, MEL's eastern Australian and GoM assets) might actually increase investor interest and this could be helpful in a variety of ways.
MAY have maintained a strong technical team that is still under-utilised - spread their talents over more assets. And of course spread corporate costs over an enlarged entity.
Purcell may be many things but I don't think he is a fool and obviously would be well aware the deal is going to be heavily scrutinised given the dual shareholdings he holds, and the acrimony incurred via his previous stoush with MEL.
Which to me makes it an interesting target as despite all that baggage, MAY are still going after MEL. MAY have independent directors who will no doubt have to be very careful about how they go about this deal. I doubt they would do this just because Purcell wants to amalgamate his holdings.
Suggest shareholders wait for the official rationale and maybe make their minds up when presented with the documentation and arguments.
I realise this is an extreme thought, but the deal might actually be a positive
MAY Price at posting:
1.1¢ Sentiment: Buy Disclosure: Held
(20min delay)