philly,
I got pushed out of my ADI investment also but I don't accept that the Board was at fault. AWE had a platform of 34% before it sounded the war trumpets. It only needed 25% of the shares in public hands to gain control and it stated from the outset that it would sack the Board (and install its own stooges) and terminate the listing. It was the AUS company law and take-over rules that allowed them to threaten that, so kick the government/parliament, not the Board. Had the rules required 75% or acquisition of 50% of the shares not held at the time of making the offer, it would have been very different. As it was, AWE was permitted by the rules to spit in the eye of democracy and the Board had no alternative but to advise investors to sell once AWE was confident that it could pick up the 25% that it needed.
AUT is a different kettle of fish.There is (so far as I am aware) no holder or potential concert party holding anything approaching that level of interest in the Company and the large placements are with fund managers (of collective investment vehicles) not arbitrageurs.
The interests of shareholders are almost certainly best served by allowing AUT (or, rather, Hilcorp) to develop those assets and de-risk the reserves. A predator might be forced to pay a premium to current share price but that predator must be able to justify so doing by seeing considerable value to be generated. AWE didn't take out the public interest in ADI as a favour to them.
As regards valuation: a few investors used a rule-of-thumb comparative valuation of AUT:ADI of about 2.5x based on acreage and the assumption that, on average, Longhorn and Ipanema are at least as good as Sugarloaf. PWC (Target defence statement) put a value on ADI of 61c (I have little doubt that you remember that!). So, AUT is still below the value projected on that basis despite the recent reserves certificate and improved drilling and fraccing techniques that promise to reduce the assumed decline rates and increase flows.
The 100c/share figure takes us back, using that rule of thumb measure, to what AWE begrudgingly paid months ago and a lot has happened since, particularly the spectacular results from phases 1 & 2 of Turnbull 3.
Finally: AWE did not have the cash (last set of accounts) to buy AUT. It could only use shares or a placement. It seems to have been languishing - look at the comparatives for production and reserves (pre-ADI). I don't see it (T/O by AWE) personally - would you accept and hold AWE shares?
I got pushed out of my ADI investment also but I don't accept that the Board was at fault. AWE had a platform of 34% before it sounded the war trumpets. It only needed 25% of the shares in public hands to gain control and it stated from the outset that it would sack the Board (and install its own stooges) and terminate the listing. It was the AUS company law and take-over rules that allowed them to threaten that, so kick the government/parliament, not the Board. Had the rules required 75% or acquisition of 50% of the shares not held at the time of making the offer, it would have been very different. As it was, AWE was permitted by the rules to spit in the eye of democracy and the Board had no alternative but to advise investors to sell once AWE was confident that it could pick up the 25% that it needed.
AUT is a different kettle of fish.There is (so far as I am aware) no holder or potential concert party holding anything approaching that level of interest in the Company and the large placements are with fund managers (of collective investment vehicles) not arbitrageurs.
The interests of shareholders are almost certainly best served by allowing AUT (or, rather, Hilcorp) to develop those assets and de-risk the reserves. A predator might be forced to pay a premium to current share price but that predator must be able to justify so doing by seeing considerable value to be generated. AWE didn't take out the public interest in ADI as a favour to them.
As regards valuation: a few investors used a rule-of-thumb comparative valuation of AUT:ADI of about 2.5x based on acreage and the assumption that, on average, Longhorn and Ipanema are at least as good as Sugarloaf. PWC (Target defence statement) put a value on ADI of 61c (I have little doubt that you remember that!). So, AUT is still below the value projected on that basis despite the recent reserves certificate and improved drilling and fraccing techniques that promise to reduce the assumed decline rates and increase flows.
The 100c/share figure takes us back, using that rule of thumb measure, to what AWE begrudgingly paid months ago and a lot has happened since, particularly the spectacular results from phases 1 & 2 of Turnbull 3.
Finally: AWE did not have the cash (last set of accounts) to buy AUT. It could only use shares or a placement. It seems to have been languishing - look at the comparatives for production and reserves (pre-ADI). I don't see it (T/O by AWE) personally - would you accept and hold AWE shares?
