Agreed Ivanovich there was definetly a leak from the "sell"...

Agreed Ivanovich there was definetly a leak from the "sell" side. Question is there any substance to the speculation or is someone playing games to boost the BGL share price? If the latter why artifically pump it in the short term when the market should take care of the price in the next 6 to 12 months.

Todays AFR article was interesting with Jason Ashton quoted as saying "we have had chats with Vocus here and there, but there has been no formal diaglogue or proposal".

Article suggests VOCUS ceo is suprised by the speculation and is quoted as saying "we've really had no interactions with BGL on that topic".

Its interesting that James Spencely did not categorically rule out the speculated deal. You would think if there is no deal, he would come out and say categorically, we're not interested in a deal - nothing is doing. He didnt do that. I also find it interesting that BGL chose to comment on the media speculation and that VOC has not released anything to the market to hose down speculation. BGL did put out a response to the media speculation very quickly after the release of the article, which suggests they were paerhaps aware of it before hand - maybe - or maybe their PR department is just super efficient?

My guess is that if there is a deal, VOCUS have only a few months to consumate it. We have seen the market appears to want solid confirmation concerning earnings before rerating BGL. I.e. we (of the HC universe) all knew about the FY12 expected surge in earnings from late last year however the market didnt really price that in until the earnings announcement released in April/May of this year. So the market appears to want solid confirmation before bidding up the price.

BGL management have indicated they will comment on FY12 earnings within the first quarter of FY12. I would assume that means they will provide some commentary on release of full year FY11 results OR as is usual provide commentary at the AGM in November with an actual earnings target for full year FY12 (i.e. commenting on first quarter results during the second quarter). I think that the market will, assuming the guidance is as positive as we think it will be, rerate BGL at that time (assuming the price hasnt run too far before hand for some other reason...).

In any takeover the acquiree is going to have to pay a premium to convince target shareholders to agree. I think the problem VOC has, if they want to do the deal, is that there are a number of near term catalysts that could lift the BGL share price, which will make the deal all that more expensive down the road. On that basis you would think if a deal is actually being considered we will know about within the next 3 months (maybe 6 months)?

Either way the next 6 to 12 months is looking bright for BGL.

Of course I would like more than .35 for any offer however if VOC was the acquiree I would take some comfort as would be more than happy to invest all or most of BGL sale proceeds into VOC or acquire VOC script in a swap.