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Asset sale an option for Bandanna

INVESTORS may be getting very nervous, but there's one reason why the auction process for Bandanna Energy probably won't turn out like the failed sale process for Whitehaven earlier in the year: the vendors are more willing to be persuaded on price.

While the stock has been savaged in the past three trading sessions, losing almost a quarter of its value to close at $1.70 yesterday, Bandanna investors can take some comfort from the fact that chairman Jeremy Barlow is a willing seller of assets but doesn't feel a great rush to do a deal.

Barlow, who began his mining career working as an underground miner in Broken Hill during university holidays and later, as founder and leader of consultancy firm Barlow Jonker, spent more than two decades evaluating coalmines and identifying investment opportunities in the sector, knows that sometimes you have to be realistic about price.

While the miner had hoped for a $1bn-plus takeover offer, a sale of assets is a more likely prospect after India's largest power utility, the state-run NTPC, told reporters in India this week that a bid for the whole company was not "viable".

Another bidder to have shown an interest in the process, Peabody, is now otherwise engaged.

Shareholders will have to bear some pain in the short term as the stock loses its takeover premium, but with Bandanna still working on a few options with different parties on a longer timetable, it's not yet time to lose hope.

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