The 90 cents will only happen if another group wishes to acquire 100% of BBP or its assets at a value of $3.6 b or more. No other group will want to acquire less and have BNB manage their money so it will only happen if they see the value and the current BBP board can negotiate an out to the BNB management agreement (i.e they may build a small launch pad stake, but they are not going to acqiuire the company , all 726m shares, at 15 cents a share).
The BBP Chairman has said, on 29 August that we will hear the outcome of the UBS strategic review in 3 weeks time, which is September 19 so I believe there is a strong chance for a major positive step change in the BBP share price.
The announcement of the UBS strategic review is a well known strategy of flying a flag to see what offers / options are available, it is basically a call to action to any parties remotely interested in the asset base. What also came through in the last couple of analysts calls is that even prior to the UBS appointment announcement they had recieved various approaches. They tried to avoid answering the question "did this include approaches for the entire asset base", which suggests to me that it does. One entity that will be very interested will be AGL, but there are many other likely parties and I believe that contrary to some analyst opinions the power generation asset values are holding up well, they have in fact booked net profits versus book values on the sales to date (despite a loss on the Tamar asset which I think was due to unique problems from the start - Alinta stuffed this up from the outset). It only takes one bid to start a process and then other parties may wish to compete. Let's face it a portfolio of generation assets such as BBP does not come along every day.
Another point wothy of note, the recent upheaval of the NSW govt. would suggest their power generation sell off is now off the agenda, thus this in turn should be good for demand for BBP's assets as there is no other vendors competing for buyers.
BBP Price at posting:
16.0¢ Sentiment: ST Buy Disclosure: Held
