TBE, I dont think I have come to a conclusion, other than BOW are initially, in the best position that we could expect them to be to leverage more value for holders.
I do think that situation normal only gives us a small premium on the initial offer. I think somewhere between 1.55-1.65 would be pretty reasonable, but not necessarily acceptable.
What I also said the other day in what some perceived as a down ramp, I call it a reality check, was that the presenece of another bidder would change things. If BG is another bidder, then I think we could be worth a little more to them. However, I dont think that BG has been giving much focus to the Bowen basin acreage that they have, or that they could have.
All in all, the only obvious thing that stands out for me, based on Shell/CNPCs timing for their CS LNG plant, is that they are seeking gas for LNG Ltd. If this is not the case, then I would also consider it entirely possible that BG could enter.
NOT WITHSTANDING A revised offer, even if it is lower than most expect, could still be rejected.
Management have a clear incentive to bid em up over the $2 mark. Whats that mean for Shell/Petro?
An initial bid at $520m @ $1.48, lifting to $2.20 say, means that they would have to outlay an additional $250m dollars, or a 48% increase on the intial bid for an amount of $790m? All just to give the directors an extra $1.6m?
The $2 option is an incentive, but I am not quite sure it is big enough to make BOW hold out. We need an extra player to help pextract full value from the resource.
Cheers,
SF
PS: I havent seen anybody commnet on BOW mentioning (for the first time I belieev) the idea of a FID on their reseource at the end of 2012/early 2013. Any comments?
BOW Price at posting:
$1.44 Sentiment: Buy Disclosure: Held
