goodaye Bob,thanks for posting that info.so it seems pretty...

goodaye Bob,

thanks for posting that info.
so it seems pretty clear that the offer will NOT be increased BECAUSE OF the reserves update.

the consideration will remain at 0.6803 STO for every ESG shares. SO if its a big reserves increase then STO might end up paying like say 10c gj 3P (pick a number).

that in itself must say heaps.

Thus STO will only increase the offer if it is forced to by:
1. a competing bid
2. the prospect of Scheme being voted down (by number of s/h)
3. withdrawal of Directors recommendation.
I think the withdrawal of Directors recommendation can occur if for example ACCC provides an adverse finding, but more importantly, if the IER finds that the offer is not in the best interests of s/h.

So IK is right - but its a circuitous argument. If the reserves upgrade is significant, the IER (and STO looks like it would be paying say just 10c/gj 3P for example), may well find the Scheme unfair/unreasonable. Then STO would have to up the offer. Catch 22?

So thats why I think the directors have decided the current STO offer is the worst case scenario.

They MUST know what the reserves upgrade will look like already, even if they don't yet have the report from the Certifiers.


As a seperate issue, i also am perplexed as to how this ASX release of material info works.
I recall this has been previously discussed here on HC.
That reserves info is critical and definately market sensitive.
Directors have a legal obligation to release info as soon as available if it is market sensitive.
There are "outs", but I am certain that just because that info is planned to be included in the Scheme docs, that is no reason for the Directors to withhold that info from the market.
So I guess its a timing matter.

I would point out that Litgation Funders have mounted cases based on directors not releasing market sensitive info in a timely manner.
If for example a s/h sold ESG shares on say 1 Sept at 86c. Then say the Directors got the reserves upgrade on say 25 August, and it was significant. ESG waits for the reserves upgrade info to be included in the IER, which is then released say on 15 Sept. Then say as a result of the material reserves increase, STO lifts its bid to say 1 for 1.

Then those s/h who sold on say 1 Sept at 86c would be really peeved-off.

imho, that non-release of material info would be fodder for a class action by the disenfranchised ESG s/h. There would be material and quantifiable damages sustained.

So I am perplexed as to how the ESG board can withold that info - because they simply MUST be in possession of that info in order to give it to the IER ?!

cheers