Negotiations....

Hi all,

I, like every one else here, have absolutely no idea what is going to evolve out of all of this. I see many posters promoting their ever-increasing and interesting wish lists; and I honestly couldn't say any one is 100% wrong.

So as per usual, I have some dot points (I tend to get bored of my own narrative) for y'all to ponder (or reject):

1) WPL have no rights for determination of any PE rights. It is solely COP and the JV partners...including Petrosen.
2) it is in COP's interest to have this matter (whatever it is/isn't) cleared up as soon as possible.
3) WPL wish the PE was never there and will make as much noise (source of rumours?) as possible to have it nullified. But its not their decision.
4) This will hamper any finance negotiations but the PE clock could still be ticking which, if true, would squeeze negotiations, thereby helping to reduce the chance of a successful pre-empt. Which is what WPL want.
5) No doubt, FAR will be arguing for any PE clock to start only when PE rights are clarified.
6) Lawyers make money, while shareholders wither on the sidelines. (OMG!)
7) Negotiating with Private Equity/non-bank finance (lets just call them "the Money" so as to not confuse with Pre-Emptive rights) is tough enough when there is a clear, unrestricted playing field.
8) There is plenty of noise in this one that'll will hamper FAR's ability to get a great/good deal done.
9) The Money have the upper hand in so many ways...especially given CNE is looking to sell down its interest.
10) The Money will have played FAR already to ITS (indicative term sheets) and Due Diligence, but will now be stalling due to PE clarity.
11) The Money will also use CNE's 'conservative' independent experts report to curtail FAR's upside beat.
12) FAR should really be coming out with the RISC report very soon. But any substantial difference will create confusion/doubt. Anyway The Money will always back the lower estimate, from a more credible company, from the operator. They are unlikely to even consider the vendors report over the operator's report.
13) The Money will use this period to improve terms whilst they make overt noise about talking to CNE to either buy some of their interest or access their PE rights.
14) CNE, given their stated desire to sell down are highly unlikely to take up their PE rights...so they are in the market as well; and the Money knows this.
15) Meanwhile a PE clock could be ticking louder and the Money will use the last 48 hours (whenever, if ever, that is) to try the last phase of wearing FAR down.
16) There is a good chance FAR may incur 'negotiation fatigue'...ie start considering conditions, values that they would not have considered at the start. This is typical deal psychology. Hang in there, CN!
17) The real leadership skill here is for FAR to NEVER loose sight of the only metric that counts...there must be an unarguably and overtly obvious (very) material short and long term benefit for shareholders.
18) It is The Money's objective to screw the terms their way and will burn equity shareholders if they can.
19) Its going to be a tough, VERY tough period of negotiations, and very probably go down to the last hour.
20) Far is not the deal-maker and its not the only deal on the table (CNE), so be prepared and accept that FAR may not be able to obtain an acceptable deal.
21) FAR won't say or hint at anything until its(?) done...one way or another.

That's more than enough rubbish for now...I'll surface again when a 'Fact' appears.

Cheers,