Ann: Pacific Equity Partners to Acquire Zenith Energy Limited, page-21

My read was the termination is ONLY allowed if Zenith directors 'do' or 'say' something contrary or hindering the completion of the deal.

I am sure the deal is not: 'we offer you $1.01, but we can change our mind at any stage up to when we deliver the buyout funds'. If that were true the market would be rife with takeover offers that were such (unbinding). The document is a signed, excecuted, legal agreement. My thinking is not any doubt or caveat in the document, but that lawyers can always find a 'way out' if they want.

Either way forward is OK by me (because the market has turned bear). If the markets had not crashed, I would have voted no. But if the market is down 20% still come June/July and us holders have picked up a 25% premium (even though that is unders) we can redeploy funds to 'something else' of our liking. And dont be tricked by the '40%' premium. Before the crash, Zenith was pushing 80 cents. THAT was the market's sentiment. PEP in past takeovers do offer around 40% over market. Without the virus, PEP would have bid over $1.10. You know that PEP have been in discussion for weeks. These things dont just happen overnight.

PEP jumped when they saw the Zenith price fall over 10% (because of the early virus drop). So what was likely a $1.12 offer in hand three weeks ago, became a $1.01 offer as markets fell. I will be so interested to read the independent report on the offer which supposedly says $1.01 is a fair offer. To the author of that report I will likely have some discussion. Because if $1.01 is fair it means I am sorely misjudging the future of Zenith. You recall my posts projecting Zenith out on simple free cash growth. I assume PEP only contracted to buy Zenith because they see a bright future for Zenith. Well, a bright future yields MY robust PE NUMBERS.

That is why I say the $1.01 is only fair in an overall bear market. In a normal market, it is way unders.

I am happy there have been 22 mill shares traded in the 90s. Plus the 25 mill Doug has declared are PEPs at $1.01. I do wonder why I have not seen the same document re Hamish and Graham's shares. But they have agreed in the bid document to sign over to PEP at $1.01

In any case 1/3rd to 1/2 of the shares of the company have traded in the 90s to $1.01 in the last week. My personal opinion is the share (with no buyout), once the virus is passed, would be well over $1 just on normal PE metric in about 12 months. Two more half yearly reports would have 'exposed' how great a company Zenith is and will grow to me more. This is why PEP jumped early. The virus gave them a 10% discount on an already discounted Zenith.