ADI - Adelphi Energy

[zerolimit]

so do we think they will make a higher offer or what?

whats the usual play for this kinda stuff? how have AEL done this before?

 

[rock86]

I have read bits and pieces of the report.
There is one aspect that I think is not mentioned in the report and will have a serious impact on the SP and that is what plans does Hilcorp have for ADI after the current 6 well program is completed. Is there any info out there about this?

So true, well i'm guessing we will see at least another 4 wells in the AMI by years end. And giving the results I wouldn't be surprised if Hilcorp ramp things up. I think we will have to wait until AUT's Ipenama well is drilled to find out Hilcorp's plans. But IMO we will always have one drill rig (if not more) on the AMI from the second half of 2010

 

[nioka]

To throw a hypothetical out there (unfounded i might add), AUT see the value so they throw in a script offer around 1.5 for 1 ADI, that will test AWE's offer, if AUT see the value they just might do that, ADI holders get exposure which we all desire, AUT build there holding of the Sugarkane AMI, AWE make a load on the script and still have exposure, maybe make a go of AUT later, just an unfounded thought!

That would make AWE a major shareholder in AUT and the directors of AUT may not be happy with that.

AUT would need to get value in the transaction by having better value for their additional acreage than is presently factored into the SP.

AUT would be better off doing a deal with EKA than with ADI given the current situation, 1 AUT for 4 EKA. ( I hold all three)

 

[AG1979]

Nioka, I was more thinking that a script offer from AUT for ADI might force AWE to move higher, as far as what is best we can only assume, EKA with AUT or ADI merge with EKA as a defensive move, either way it would be nice to see a higher offer from AWE straight away. You are completely right with AWE's major holding in ADI, it makes it less attractive as a target for any other buyer. (I hold both ADI & AUT)

 

[5haretrader]

What are script offers? Its sounds like an artificial manipulation of the share price if AUT don't have the intent to go through with such an offer. However, having said that, that could be all that AWE is trying to get out of this smart little business ploy.

 

[Kremmen]

AUT would be better off doing a deal with EKA than with ADI given the current situation, 1 AUT for 4 EKA. ( I hold all three)

I think 1 for 4 would be way more laughable than the offer for ADI at 40c. If all three are going up together, it's surely because of the joint venture. (ADI and AUT have additional value on the side, but it's longer term, especially for ADI.) EKA's share of the JV (per share) is greater than AUT's and almost as large as ADI's! (EKA only has 12.5%, but much fewer shares on issue too.) So, in a period in which ADI and AUT have risen over 20c, EKA should have risen close to 20c too. (Instead, it's risen about half that.)

1 for 2 would be more like it.
(I also hold all three.)

 

[nioka]

I think 1 for 4 would be way more laughable than the offer for ADI at 40c. If all three are going up together, it's surely because of the joint venture. (ADI and AUT have additional value on the side, but it's longer term, especially for ADI.) EKA's share of the JV (per share) is greater than AUT's and almost as large as ADI's! (EKA only has 12.5%, but much fewer shares on issue too.) So, in a period in which ADI and AUT have risen over 20c, EKA should have risen close to 20c too. (Instead, it's risen about half that.)

1 for 2 would be more like it.
(I also hold all three.)

You have to look past the joint venture when comparing AUT and EKA. I'll settle for 1 for 4. The market also settles for around that figure. If you believe 1 for 2 then you should sell AUT and buy EKA now.

 

[philly]

so do we think they will make a higher offer or what?

whats the usual play for this kinda stuff? how have AEL done this before?

To my knowledge this is the first time that AEL have engaged in a takeover bid. AEL is a subsidiary of AWE. When AEL was taken over by AWE the AEL board recommended the takeover so there were no plays as such.

IMO we have to wait for AEL to react to the ADI report. AEL can then increase their offer or put the takeover to bed.
In terms of when AEL will decide what to do I guess they are in no hurry and can wait until July when their current offer expires.
In the meantime the SP will have a fall back price of 40cents and if there is any + news from the fraccing program the SP could get a bit of a push along. If there was some good news and SP goes up then that may force AEL to decide sooner what it will do. ATM patience is required. All IMHO & DYOR

 

[zerolimit]

thanks philly

i have picked up a small parcel since with the .40c reasonable solid backstop i might make a quick dollar or two if they raise their offer.. if not sell at .40 and take a small loss

interesting to see what they say regarding the target statement

 

[jancha]

thanks philly

i have picked up a small parcel since with the .40c reasonable solid backstop i might make a quick dollar or two if they raise their offer.. if not sell at .40 and take a small loss

interesting to see what they say regarding the target statement

You make it sound so simple.
What if they dropped their offer?
Where would ADI sp price be then?
It would be more than just a small loss however imo things are looking fairly rosy for ADI.
I cant see the sp going anywhere until July even with Rancho's results being on par with Morgan.
I dont think they have anything else in the pipeline other than that do they?
Just a waiting game until then.
Perhaps Agentm would have a better opinion on it.

 

[barney]

You make it sound so simple.
What if they dropped their offer?
Where would ADI sp price be then?
It would be more than just a small loss however imo things are looking fairly rosy for ADI.

Probably worth noting again for the punters in general:-

The Corporations Act permits the withdrawal of unaccepted offers only in exceptional circumstances.

Failing anything off the map happening, the offer will stand and run its course as submitted. Basically AEL can't do any backflips without incurring the wrath of the powers that be. So the SP has a firm base till July 9.

Be nice to see a revised bid on market by friday July 2, which would prove these guys are serious. At the moment I'm still a little unsure of their true motives, but would not be surprised if the T/O offer is an attempt to "fish" out a bigger player. If our leases are as good as they are shaping up, Hilcorp looks the obvious candidate, but that is pure speculation ..... Could be a bit more subterfuge to play out before this gets sorted I think.

 

[Sdajii]

You make it sound so simple.
What if they dropped their offer?
Where would ADI sp price be then?
It would be more than just a small loss however imo things are looking fairly rosy for ADI.
I cant see the sp going anywhere until July even with Rancho's results being on par with Morgan.
I dont think they have anything else in the pipeline other than that do they?
Just a waiting game until then.
Perhaps Agentm would have a better opinion on it.

Even without the offer, ADI probably wouldn't change much. They got into the high 30s even before the offer, and quite conceivably could have been over 40c now without it; we're in a better position now than then, and I think without the recent slump, ADI would be over 40c irrespective of a takeover offer (although it certainly wouldn't have outperformed the average market value to the same extent). The 40c offer might actually be holding the price down, with it standing as a psychological point of value, preventing the price from going much higher.

 

[zerolimit]

You make it sound so simple.
What if they dropped their offer?
Where would ADI sp price be then?
It would be more than just a small loss however imo things are looking fairly rosy for ADI.
I cant see the sp going anywhere until July even with Rancho's results being on par with Morgan.
I dont think they have anything else in the pipeline other than that do they?
Just a waiting game until then.
Perhaps Agentm would have a better opinion on it.

Well reasonable solid backstop of 0.40c means i don't think the offer will dissapear anytime soon, the risk is if the offer is pulled early but as barney said that they cannot just pull it tommorrow because they don't like the target statement etc AFAIK. DYOR.

So on that basis i believe the SP has a pretty good backstop of 0.40c while the offer stands, hence for the small loss.

 

[philly]

Between 17 May and today Goldman Sachs JBWere Holdings Pty Ltd have acquired 8, 545, 546 ADI shares. This is just over 5% of the issued shares.

 

[5haretrader]

Is this a good thing philly? Goldman Sachs are a pretty established company so you would assume they know what theyre doing...or are they sneaking under the radar for a move at something?

 

[Kremmen]

This could be great news. If ADI is now on Goldman Sachs's radar, that's really getting into the big end of town. Maybe Goldman is positioning to make a counter-offer, or maybe they are planning to sell when a better offer comes along. Either way, they're not buying to make a loss.

 

[jetblack]

Yes, great development for ADI . The bid by AWE is soo bad that its good for ADI holders. From a discussion with the MD just when ADI announced their CR it was mentioned then that they have the support of AWE.

Anyway, my point is out of all the jvp's imo ADI has been best positioned for the further development of the Sugar. They are cashed up and I believe this is where Hilcorp will focus majority on first. These wells are cash cows and believe this bid by AWE was to support ADI shareprice (re, a GFC2 and in anticpation of Hilcorps speed) as there is in my mind a second cashed up player on the go.

Nothing like speculation eh!

 

[Ramblin Round]

Be nice to see a revised bid on market by friday July 2, which would prove these guys are serious.

It would be very delicious to see a bid revision prior to the deadline and I do think that would seal the deal for AWE if it is at (or even near) the acceptable FMV. ADI has shown their hand on what they know they are worth, WHY they know they are worth it, and what they intend to do about it. The thing I have always wondered is what is the future of Australia exploration companies in a Texas play ? What was the thought process/exit strategy getting into this thing back in 2005 to begin with ? Obviously AWE wishes to be in the shale plays in Texas. They even discussed it in their recent presentations.

It's like fishing now with the Target Statement out as the bait. Just sit back and wait who bites.

 

[zerolimit]

I feel this is good news that Goldman Sach's have bought in at 0.41 and a substantial amount of shares as well, i believe the second highest shareholder after AWE itself?

They must either belive that the offer will go higher and they are after a quick profit, or there is some other play at hand.

i might increase my holdings on this news... as it just strengthens my convinction that 0.40 offer is just the start!

i do hold ADI

 

[WRONG'UN]

If GS buy another 5% they will be able to block AWE's right to compulsorily acquire the last 10% of ADI - ie they would be in a position to force AWE to raise their bid if they want the company.