Once again it is time to be patient with HGO. As per the usual, in the face of good news there has been a lot of selling which has kept the share price well below where it should be.
In a few days the sellers will dissipate and the share price should start heading north towards 30c.
The brokers reports on ESG are an interesting read. Morgan Stanley are saying that STO bought in at 65c/GJ which is below the average of recent CSM deals of 75c/GJ and is a pretty reasonable deal for STO. Pattersons have correctly pointed out that STO bought GasStar holding for 65c/GJ while STO paid 95c/GJ for HGO's stake.
So HGO has sold out at a significant premium to GasStar and at an above average price for CSM sales. Throw in the free option on a takeover of ESG and it appears HGO have done pretty well out of the transaction.
HGO has obtained an almost 50% premium to GasStar.
time and value
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