EKA - Eureka Energy

Ever since EKA became vastly better value for the same assets, it was obvious that EKA was better value than AUT.

For AUT, just like us shareholders, EKA is better value than their existing holding, so I've long believed that AUT should buy EKA. (Plus, they get the advantage of consolidation of the two parallel operations.)

Finally, AUT has made an on-market takeover offer. It's way, way below what EKA's assets are worth, if you measure them by the same metrics as AUT and given the trading range so far, 46.5-48c, it looks like nobody believes this is the final offer.

EKA has rejected the AUT offer of 45 cents as below value.
It says SUGARLOAF is valued at 56 cents per share minimum. Also the current offer does not take into account EKA'S other interests namely Pan de Azucar [675 acres], Black Jack Springs [916 acres] and the Brioche Project [4460 acres] or cash reserves [$5.2 m as at 16/3/12]. It is difficult to factor in any value for its other acreage as at the moment we are dealing with potential. The cash reserves would be woth 2 cents per share. All in all it would seem that AUT will need to bid higher if it wants EKA. IMO it looks like 58 cents would be a starting point.
I hold EKA

More potentially good news: EKA has a new CEO starting 10 May, who used to be Project Manager of Group Mergers and Acquisitions for BP, before coming to Australia. That could be useful background in the current circumstances.

He only gets to keep his job if the takeover is unsuccessful. I like him having that motivation!

Two new announcements out this morning both reinforcing why the AUT offer of 45 cents is below par but IMHO both also suggesting that if a higher offer was made then things might be different
I hold both EKA & AUT
All IMHO & DYOR

As of today AUT cannot extend or raise its offer for EKA UNLESS it achieves certain conditions are met.
Interestingly, 2 directors still reject the offer whilst one of the director's is selling up in the absence of a superior offer. Makes you wonder a bit. Also what will happen to the SP once the offer is off the table? Does it drop back to mid 30c where it was before the offer? Do you sell for 45c and re buy on the drop/ Still plenty to unravel with this one. Stay alert. All IMHO
I HOLD

Non-binding merger proposal from Lonestar Resources, Inc


Eureka Energy Limited (ASX: EKA, "Eureka" or the "Company") advises shareholders that it has received
a non-binding and incomplete merger proposal from an unlisted US based company, Lonestar
Resources, Inc (Proposal), whereby Eureka would be the acquiring entity. Lonestar has stated that it
believes its proposal to be an alternative to the current offer from Aurora Oil & Gas Limited (ASX: AUT).


Alot of big trades have been going through over the last few weeks above AUT's offer price. This is obviously been the reason. A people try to tell me that insider trading doesn't happen

RedMax

Eureka! Bidding War Looms for U.S. Shale Developer.

Article in Wall St Journal on 8 June by Ross Kelly

It ain’t over till it’s over.

Just hours after Aurora Oil & Gas said it won’t extend its 107 million Australian dollar (US$105.6 million) offer for Eureka Energy beyond next Friday, signaling an end to a seven-week takeover tussle for the U.S. shale oil developer, a rival bidder has thrown its hat into the ring.

Closely held Lonestar Resources, which owns 5,691 net acres in the Eagle Ford Shale in Texas among other U.S. assets, has offered Eureka an alternative to Aurora’s rebuffed cash bid worth 45 Australian cents a share.

Details of Lonestar’s proposal are thin, with talks due to take place with Eureka’s board this weekend.

Lonestar’s overtures already have one big attraction for Eureka’s board: the chance to reunite and get themselves out of a pickle.

Their early rejection of Aurora’s offer as inadequate may have been a tactic to secure a higher bid from Eureka’s ASX-listed rival. But it was a move laden with risk, and Aurora opted to play hardball after criticizing a debt facility that Eureka took out subsequent to Aurora tabling the A$107 million bid.

In a statement Friday, Aurora confirmed its bid would close on June 15. Aurora’s statement is significant as regulations make clear it isn’t allowed to increase its offer price between now and then, except in certain circumstances.

But Aurora’s stance appears to have put the cat among the pigeons at Eureka whose board split with two directors sticking to a view that shareholders should reject the bid, and another director saying they should accept it because choppy market conditions made it likely that Eureka’s share price would suffer soon after the offer period ends.

Aurora and Lonestar have similar rationales for trying to acquire Eureka. Both have a significant footprint in the Eagle Ford Shale region, so understand its geology and potential. While a boom in U.S. shale gas production has driven down domestic natural-gas prices, the Eagle Ford shale is rich in liquids, which attract higher margins than gas.

Eureka’s shareholders appear to see the potential for upside, especially after the emergence of Lonestar, which is being advised by Deutsche Bank. Eureka shares closed 4.4% higher at 48 cents each Friday.

With more twists and turns than the average oil and gas pipeline in the U.S. midwest, this takeover saga looks like it has further to run.

IMHO Hold onto ya horses shareholders
I HOLD

EKA directors have rejected the proposed merger with Lonestar.
The SP is down 3 cents today to 45 cents which equals the AUT bid
Where to now?

Well it appears AUT may get their prize.
IMO, if the SP stays around 45c, then it could only be AUT accumulating. AUT is also offering stock at a 20%+ discount to recent highs so a great time to swap over and put in a drawer.
Good luck.

The EKA directors have recommended that shareholders accept the AUT offer.
They will be selling out.
As at this morning AUT held 33% of EKA
This has played out much the same way as the AWE bid for ADI a few years ago.
Ordinary shareholders forced to sell out at a very low price.
The party is over

AUT has been very lucky. The market in general, and the oil price in particular, have had sustained falls since the takeover bid.

However, we've been lucky too. For those of us who bought (back) into EKA around 17-18c last November, we've almost tripled our money in 7 months. Better yet, the extension to 6th July means we can sell next financial year and not have to pay the tax on the gain until 2014.

I'll be saying a fond farewell to my EKA holding on July 2.

How's this for insane?! With only 7M shares left and compulsory acquisition announced, someone is buying EKA for 46c!

Hey all,

I just logged into my eTrade account after its been sitting dormant for 2 years and noticed I have no value showing for my EKA shares. After reading this thread I have sort of worked out whats going on but whomever brought EKA, should I be getting compensation or new shares?

My account shows EKA still in my portfolio but with a value of $0

Any help?

Thanks.

easylikesunday said:

My account shows EKA still in my portfolio but with a value of $0

Click to expand...

You really need to keep track of your shares, EKA was taken over by AUT a year ago. Read the half a dozen posts before yours and this link.

Cheers
Country Lad

Country Lad said:

You really need to keep track of your shares, EKA was taken over by AUT a year ago. Read the half a dozen posts before yours and this link.

Cheers
Country Lad

Click to expand...

I have read the link and from my understanding I should be compensated?

It says I don't need to do anything and that I should be paid .45c a share.

The process takes 4-6 weeks apparently but its been over a year. As I sais the code EKA still sits in my eTrade portfolio but with a $0 amount worth.

You should have received 45 cents per share IF your details with Computershare were current at the time, ie they had your address or bank account.

If you did not give computershare these details the question arises how can they get the payment to you? If they had an old address the money would have been sent there.

There is more to this game than just buying shares through a broker, you need to make sure that the share registry and consequently, the company has your contact details so they can find you. The broker has nothing to do with you receiving dividends, payouts such as this, notices from the company etc. That is what the share registries are for.

Best you contact Computershare who was the registry for EKA. Also tell the broker to tidy up their records.

Cheers
Country Lad