Of course there is equity in the AEJ. Why would someone have already made an offer for the whole of the company after doing due diligence if there was no equity there. Why would a private equity group buy a large amount of their debt on the secondary market, if they thought there was no equity there?
The vultures are relying on management to cave in (which so far they have no shown any sign of doing)and share holders to panic and accept a paltry amount for there shares based on a some heavily manipulated Average Price (VWAP) or whatever rubbish they no doubt will come up with.
The real darkhorse here is GPG. They are being very patient and waiting until the last minute before making their move. They could easily partner with a deep pocketed company to take control of the whole company when the time and price suits them.
And why wouldn't they. Electricity prices will sky rocket over the coming few years, a price on carbon will happen and AEJ's gas powered power stations are currently the most carbon efficient power available.
Final offers and proposals are due by 31 August and then a decision by the end of September. Do the Directors really need a month to decide which is the best offer? Or is there some other reason why they are taking their time and not being hasty to act. Perhaps this the best way to fend of the vultures of private equity? Or will 2011 EBITDA be estimated by then and be a real game changer?
Granted, it could go either way. We could be offered 3 cents for our shares and told to take or leave. Or we could be looking at a multi-bagger. I'm in this to end, no matter which goes.
AEJ Price at posting:
5.5¢ Sentiment: LT Buy Disclosure: Held
