SO, the situation is that PF has tried to twist the screws a...

SO, the situation is that PF has tried to twist the screws a bit, and CUE (with-in its right) has said.......wait a sec....you have altered the agreement we already had to our disadvantage.

PF will have highly trained negotiators who know that they are in a position to exert maximum leverage and gain a few percentage points of advantage.

Unfortunately for PF, CUE are not prepared to be pushed around either.

Negotiating 101 tells you to walk away from the table (and be prepared to lose the deal) to be sure that you have extracted everything possible, and see if there is a crack from the seller under the pressure (angry shareholders/media etc).

Yesterdays clarification from CUE is evidence this building pressure.

Although some horse-trading may have been foreseeable from the JV, there is nothing MEO can do except try to broker an agreement....cant exactly take JV to court if they have only signed a memorandum of understanding.
(I also think media should cut Jurgen some slack for the position that JV has placed MEO in.)

The reason that I still feel positive is because JV is not likely to walk away from this process too easily:

- If they want to throw in the towelbecause of a hiccup, why would they have spent months negotiating and thousands in legal fees?
- IMHO They have no intention of walking away from the deal, they just think they have the power of leverage at this time.
- They negotiators not being paid to throw a hissy fit its all about dispassionately getting the max value.
- Although they are in a strong position as Mr Moneybags, they also need to be mindful of MEOs right to seek out no 2 of the 20 potential farminees.

This might take a week or two (maybe less), but it will be resolved favourably IMHO.

GL all.

John S.


MOG, VIL, MHL, ERJ