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.
eMark said: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).eMark said: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
scsl said: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 said: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.
eMark said: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.
Ken said: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!!
Porper said: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.
kennas said:Anyway, anyone who sold did the right thing probably and it's a bad lesson for those that held.
Porper said: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).
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.Porper said:for the people that held from the highs, they will think that their plan worked
GreatPig said: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
GreatPig said: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
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 outkennas said: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!
haemitite said: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
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