Alley,I hope for the 40% premium Having said that and stepped...

Alley,

I hope for the 40% premium

Having said that and stepped back from the screen it does seem a pretty generous premium . It was based on "Recent" M&A which is now outdated as there have been very few examples of take overs recently - hard to think of one even outside the O&G sector

Found one - SXY scrip 2.5 for 1 STU 21/2/11
SXY close 18/2/11 = 0.455
1mth VWAP for STU at 18/2/11 was 0.68
So at face premium was (2.5 x 0.455)/0.68 = 1.67 (67%)
67% to the 1mthVWAP

So should we recalibrate our expectation of a +40% upwards
based on the SXY-STU experience

On 19/5/11 SXY made the 100% acquisition announcement

SXY closed 19/5/11 at 0.350 so 2.5x = 0.875 which is only a 0.875/0.68 =1.29 or about a 30% premium to the 1mthVWAP of 18/2/11

On the last day of trade for STU 19/4/11 its 1mth VWAP was 0.93 as opposed to 0.68 on 18/2/11 so on market you should have been able to easily dispose of your STU shares for Cash at about a 37% premium

At first Offer 21/2/11 67% premium to 1mth VWAP
At STU ceasing trade 19/4/11 37% premium --
At final 100% acquisition 19/5/11 30% premium --

I still reckon our 1mthVWAP+40% is reasonable in a take over by STO or GLNG or any one of the many other-bidders circling and sniffing.

You cant fault the persistence of the Crew

If they can Bark up the sp good on them

The irony is that even with the 40% premium the last share purchase plan price of 85cps will hardly get a lick of a profit

The worry is that there are some who reckon they know better than the Market does

If someone showed a graph of the sp of Share "XYZ" and using a high technology tool like a ruler drew a line through the points so the slope was steep from the left hand top corner to the right hand bottom corner what would an observer conclude ?

A bargain to back the truck up to , a much troubled stock to avoid like the plague , has potential but will wait and see if the downtrend stops

Who was that bunch that did the dog analogue - cattle dog, labrador, poodle and greyhound. They didnt have a graphic that showed the door to the Vet.


The Market has a message and ignoring it is not wise.


The most amazing aspect of the HC ESG story is that some of the Crew think that my persistence in rationality is a contra indicator meaning that all must be well with ESG as they perceive my posts as an attempt to hold the price down like sitting on a spring. They reckon that I must "know" that ESG is great and good because I persist counter intuitively to their perception that the only valid persistent poster type on HC is of the BR/BS variety.


I dont know any more than the Market does. I have no special connections.

I know there is a very significant GIP the development of which should result in a profit for ESG.



Cheers