HDR - Hardman Resources

[scsl]

HDR has endorsed a $1.47 billion friendly takeover offer from UK oil and gas producer Tullow Oil. Management have recommended the $2.02 offer.

Hardman said the offer represented a 60% premium to the volume-weighted average price of its shares in the week prior to the arrangement.

Tullow is offering a share alternative, which will allow Hardman stock holders to receive 0.22289 new Tullow shares for each Hardman share, to a maximum of 65 million shares.

Hardman chief executive Simon Potter said the share option gave Hardman shareholders the ability to retain exposure to the company's quality assets with the additional leverage offered by a significantly bigger company.
"The board has concluded that Tullow's offer has the value and flexibility to appeal to Hardman's varied shareholder base, and we recommend the offer to our investors," he said in a statement.

London-listed Tullow is one of Europe's largest independent oil and gas producers, with operations in 15 countries and a market capitalization of GBP2.339 billion (A$5.90 billion), the statement said.

 

[redandgreen]

what are the chances of WPL making a bid at this stage?

 

[eMark]

Can someone please explain to me why HDR is trading? The Tullow offer is 2.02, yet HDR opened up at 2.09? That's great, but can someone explain to mew how this works? Does this mean the share price offer may have to be revised due to the current price? Or is it just how it works? HDR never had an official trading halt this morning did it? I thought it would have until the offer was accepted or not?

Thanks

e Mark

 

[Sean K]

Can someone please explain to me why HDR is trading? The Tullow offer is 2.02, yet HDR opened up at 2.09? That's great, but can someone explain to mew how this works? Does this mean the share price offer may have to be revised due to the current price? Or is it just how it works? HDR never had an official trading halt this morning did it? I thought it would have until the offer was accepted or not?

Thanks

e Mark

Markets anticipating a higher offer. For the minute. If nothing pops up, will trade back down. Just people taking a punt really.

 

[scsl]

Can someone please explain to me why HDR is trading? The Tullow offer is 2.02, yet HDR opened up at 2.09? That's great, but can someone explain to mew how this works? Does this mean the share price offer may have to be revised due to the current price? Or is it just how it works? HDR never had an official trading halt this morning did it? I thought it would have until the offer was accepted or not?

Thanks

e Mark

Mark, in almost all cases, the company that has received a merger/takeover bid will end the day trading at a slight premium to the price offered. This premium usually gets smaller, especially if less people anticipate another offer. If the proposal succeeds, the buyer will not have to revise due to the premium - although it isn't unusual for them to increase their offer so that the takeover can be completed (Peabody recently increased its offer for Excel Coal as some shareholders wouldn't accept the initial bid).

As for the trading halt, I didn't see an official notice. But HDR was not able to be traded for a period after the opening.

 

[eMark]

Mark, in almost all cases, the company that has received a merger/takeover bid will end the day trading at a slight premium to the price offered. This premium usually gets smaller, especially if less people anticipate another offer. If the proposal succeeds, the buyer will not have to revise due to the premium - although it isn't unusual for them to increase their offer so that the takeover can be completed (Peabody recently increased its offer for Excel Coal as some shareholders wouldn't accept the initial bid).

As for the trading halt, I didn't see an official notice. But HDR was not able to be traded for a period after the opening.

Thankyou very much for your input.

What to do now? As I'm sure most traders I thinking. It's ironic that I am now in the green now as much as I was in the red at close Friday. Temptation is to sell, but that was the reasoning for the above questions. Seems to holding firmly at it's premium at present.

 

[It's Snake Pliskin]

Thankyou very much for your input.

What to do now? As I'm sure most traders I thinking. It's ironic that I am now in the green now as much as I was in the red at close Friday. Temptation is to sell, but that was the reasoning for the above questions. Seems to holding firmly at it's premium at present.

A 54% rise is something not to miss out on regardless of the anticipation for more. For a stock that was distributing technically you have done well. Regarding the fundamentals at play here I cannot comment.

 

[Sean K]

Thankyou very much for your input.

What to do now? As I'm sure most traders I thinking. It's ironic that I am now in the green now as much as I was in the red at close Friday. Temptation is to sell, but that was the reasoning for the above questions. Seems to holding firmly at it's premium at present.

Mark, you're not going to get less than $2.02, so why sell for $2.04 when WPL or BHP or BP or someone might trump the offer? My thoughts only of course, but history shows than many takeovers result in counter offers and higher premiums. I'm holding for maybe a bit more, or hey, in the end, happy with $2.02!

 

[Ken]

well i am ****ty because i owned this stock for a while. held through the rough times, but at 1.20 i called it quites, as i thought it had been dumped by market. was bad news floating around everywhere.

now they come out and go boom!!

where was the heads up!

surley tommorows paper needed to regain some ground

that will teach me for following the crowd i guess

 

[Porper]

well i am ****ty because i owned this stock for a while. held through the rough times, but at 1.20 i called it quites, as i thought it had been dumped by market. was bad news floating around everywhere.

now they come out and go boom!!

It was getting dumped by the market, it has been in a steep downtrend for a while now.People who got out did the correct thing.A takeover is just a lucky break for HDR holders who held on to a share spiralling down.

Makes you think though, I was shorting this a few weeks ago with no G.S.L.Could have been burnt severely.

 

[Sean K]

It was getting dumped by the market, it has been in a steep downtrend for a while now.People who got out did the correct thing.A takeover is just a lucky break for HDR holders who held on to a share spiralling down.

Makes you think though, I was shorting this a few weeks ago with no G.S.L.Could have been burnt severely.

I agree Porper, this was a very lucky break. My ill discipline resulted in me holding on to it. Probably because I have this strange 'investment' vs 'trading' portfolio, and htis was classed as investment. The investing rules are different for me. Maybe they shouldn't.. Anyway, anyone who sold did the right thing probably and it's a bad lesson for those that held.

 

[Porper]

Anyway, anyone who sold did the right thing probably and it's a bad lesson for those that held.

The trouble is, for the people that held from the highs, they will think that their plan worked.Unfortunately the next one, or two trades they hold on to etc won't work with this method.

A good book I recently read on psychology would imply this is faulty learning.

Kennas,

On the subject of having 2 seperate accounts for trading and investing, how do you feel this works in practice.I have thought about it but I'm not convinced that I am strong enough mentally yet to not fall in to the trap of letting a trade turn into a bottom draw investment.This would be suicidal in monetary terms. (sorry off topic slightly).

 

[Sean K]

Kennas,

On the subject of having 2 seperate accounts for trading and investing, how do you feel this works in practice.I have thought about it but I'm not convinced that I am strong enough mentally yet to not fall in to the trap of letting a trade turn into a bottom draw investment.This would be suicidal in monetary terms. (sorry off topic slightly).

It's hard. I've fallen into it for short periods and have had to post my trading rules on the wall next to each portfolio so I don't forget.

 

[GreatPig]

for the people that held from the highs, they will think that their plan worked

Although for anyone who bought at the real high (around $2.40) and is still holding, they still wouldn't have got their money back yet.

GP

 

[nizar]

Although for anyone who bought at the real high (around $2.40) and is still holding, they still wouldn't have got their money back yet.

GP

It will get there when the rival bid comes

 

[YOUNG_TRADER]

HDR is another example of what happens and will continue to happen unless the Aus mkt prices its stocks appropriately

 

[Sean K]

Although for anyone who bought at the real high (around $2.40) and is still holding, they still wouldn't have got their money back yet.

GP

I bought my first batch at $2.30ish, then bought more on the way down, which was either stupid or a good move in hignsight.

 

[haemitite]

Mark, you're not going to get less than $2.02, so why sell for $2.04 when WPL or BHP or BP or someone might trump the offer? My thoughts only of course, but history shows than many takeovers result in counter offers and higher premiums. I'm holding for maybe a bit more, or hey, in the end, happy with $2.02!

And there is also potential upside to the acquirer's share price, given Tullow shares form part or all of the consideration. Its worth holding on and watching how this one plays out

 

[scotth_73]

And there is also potential upside to the acquirer's share price, given Tullow shares form part or all of the consideration. Its worth holding on and watching how this one plays out

You guys said it.....the first bid is rarely the last. Given that the board has recommended shareholders to accept the offer in the absence of a higher bid suggests that $2.02 is as low as HDR will go. i've taken a look at forecast earnings for the company, and even though Chinguetti has been downgraded recently, Tullow is offering around current market values for aussie-listed oil stocks (around 16.5 times earnings). What leads me to speculate that the offer is cheap is that the Tiof development is not factored into the numbers to the degree of its proven resources by CY09, and with the fact that some of the big UK oil and gas co's are struggling to increase their forecast productions increases the liklihood of a higher offer. additionally, WPL is cashed-up and could see this as an opportunity to part-redeem the production woes it's recently faced in Africa. Only suggestive, but with a 2c downside (1% + brokerage) if no other offer appears, and solid upside if it does.

 

[nirama]

Just trying to work out why HDR is up to $2.12 now......Is there interest because another takeover bid is coming or is this just normal????