Less than 30% premium was never going to be enough to take it out, especially when the bid was all-scrip with WPL shares during a time of terrible SP performance and further potential to fall. They'd need to offer 40% to even start talks.
The problem for WPL is that OSH's SP has not collapsed in the oil crash like others have, eg STO. That reflects both the quality of their project and also the fact that it was obvious OSH was a takeover target if the SP drops too low.
OSH has always been a tempting but difficult target because it's traded on a forward premium for years now. There is simply no value in taking over OSH because of that premium. WPL know this is about as low as it's going to get, so it was worth a lowball shot, but I would hope they will walk away now. They're not going to secure OSH at an acceptable price. As oze_wolverine pointed out, the market knows that and any higher bid will be met by a similarly higher market beatdown.
There is no value if you have to pay full price. If they really want to get into PNG-LNG they'd be better to target STO's stake. It's smaller, but STO is distressed so there is more chance to find some value there.
WPL Price at posting:
$28.41 Sentiment: None Disclosure: Held
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