Reality is, every permutation or combination is on the table at the moment for the upcoming M&A action.
Whilst I would not rule out any play with STX or WGO, I believe the perceived "bad blood" in that JV needs to play out internally, first. I think that is in play at the moment, with the likes of Regal recently taking a large position in WGO. I'm expecting that party to be crashed shortly...
Having had experience in the Corp Finance / IB world, I know that there will be a number of IB's running the numbers, having "informal" chats and presenting proposals to various parties out there - both potential prey and potential acquirers. Bit like having an attack plan and defensive plan. That is how it works. Been involved in a few in my past life. The wheels will be turning as we speak, and invariably when one player makes a move it will force the hand of others. The games are likely to just be beginning...
Wrt NWE, they are almost like in their own protected universe. MIN/ERL have all the power ATM. They have a 19.7% blocking stake and fair to say, everyone knows MIN have the balance sheet to make M&A plays. Chris E will not want to be on the losing end after his attempt at AWE. He is a very good chess player IMO, but won't pay nose bleed prices - a very commercial astute MD.
So who else?
Well, I have inkling the NWS JV players will be worth watching. I think the attractiveness of back-filling the NWS LNG with PB gas will entice some action. With BP taking all of BPT's Waitsia LNG, they are sorted. Mitsui is likely going to be selling their half to themselves I imagine - as MIMI (which is a 50/50 Mitsui / Mitsubishi JV for NWS) is well entrenched in the Aus gas market. I would not rule out Mitsubishi making a play. They are a very competitive lot the Japanese... Mitsubishi will likely want to show Mitsui they can play with the big boys too. Again I have seen that happen at involving both donwstream and upstream assets.
You can rule out BHP IMO as they are pushing off their O&G business to Woodside.. so rule out WPL too... too much on their plate ATM.
Chervron I believe are selling their stake... and Shell... maybe.... unlikely though.
Wesfarmers are a dark horse. Very powerful balance sheet, and have a proven history of being very acquisitive. Didn't they snap up Kidman lithium only 2 years ago? Their fertilizer business is very gas hungry and they quite like the idea of controlling the whole supply chain. I have dealt with the WES M&A team in Perth in my former corporate life... bunch of crafty, super smart people there. WES is very powerful in WA circles too (plus all the way up to the Fed govt).
Honestly I could keep going with my theories... but I may bore some of you!
Needless to say... watch - this - space.
GLTA
NWE Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
