merger details out, page-53

"Marius Kloppers, chief executive of the Anglo- Australian mining giant, waived his annual bonus recently because a fall in the US natural gas price had forced BHP to write down the value of shale gasfields it bought 18 months ago by $2.8 billion.

Yet the price has recovered sharply since then and, in a rare interview, Mr Nasser discloses that if the valuation were done now there would be no impairment at all."

The BHP Chairman seems to think that values have now recovered from a temporary fall but this deal does not seem to recognise that.

Whether the deal is fair depends upon the degree to which SEA's own assets are undervalued. If the degree of undervaluation is comparable, then, as shares are the currency, we should not lose out if we hold onto the consideration shares.

A number of TXN holders have revealed that they hold SEA and are impressed with the value created by management but feel that SEA has gained more than it has lost from this deal. That seems pretty evident from the cash value of the deal at yesterday's price but could TXN have generated more value by continuing the development itself? That would require a huge mount of cash (which SEA has but TXN has not) and dilution would have been inevitable.

So, perhaps it's not just a simple calculation - particularly as TXN has retained rights over the land in respect of shallower formations.

It is also inevitable that TXN's share price will be linked to SEA's for the time being.

Perhaps we should sit on them for a while and see what happens. I can't hide my disappointment but selling in reaction may not prove to be the best option.