Australian (ASX) Stock Market Forum

Takeover Targets

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Now, before I begin I think something needs to be made clear here...if this thread is to have any ounce of surviving and thriving it needs to contain thorough/detailed analysis of why you think a certain co is a T/O target (not just because you think so). Also, I hope some poster's don't mind; but I will be stealing, nay, shedding more light on your valuable postings for here.

I have created this thread (as the title would suggest) in an effort to highlight takeover targets in this distressed market environment. Big players may well be looking to make moves on up and coming juniors and it might be a nice way to bring these juniors to notice.

First stock to look at is: MEL
YOUNG_TRADER said:
Was just looking at MPO and how it sold its NSW Gloucester PEL 285 for $370m to AGL (MPO only had 30% interest)

PEL 285 had 2P of 180 PJ and 3P of 360 PJ

MEL has 2P of 247 PJ and 3P of 1400 PJ

Based on recent take overs and even MPO's sale I would think MEL stands a fair chance of having an offer made given its current mkt cap is $75m with $15m cash leaving an EV of $60m for those large 2P and 3P reserves
Click to expand...

Attachment from Kennas - https://www.aussiestockforums.com/forums/attachment.php?attachmentid=29705&d=1240799224 - This highlights MEL's value in the CBM sector for the 2P category

MEL has the cheapest 2P and 3P reserves out of all the CSG player's. It is also a cashed up junior with drilling currently on some very prospective tenements (PEL 13 + Riflebird). Recent acquisitions in the CSG sector (QGC, PES, SGL) also bode well for MEL. Majors would surely still be looking around for juniors for LNG plants.

Dangerous also highlighted some interesting facts today:
Dangerous said:
It is at an advantage to its QLD peers - CSG to LNG is not proven and still faces signifcant obstacles. NSW has a pending electricity crisis and CSG use in gas fired power stations is tried and tested...
Click to expand...

Feel free to add more...
 
PRU - because I own it. :)

And, because it's undervalued in the sector and a few majors have been saying they want to buy some more assets. Also been mentioned in the media several times as a target. And, there's probably going to be more M&A in the West African gold sector.

Warrick Grigors last comments:

Investment Perspective: Perseus (PRU) continues to stand out as one of the most significant emerging gold producers due to its resource base (approximately 7 mill oz.) from two projects in West Africa. It is not a company that will suffer from the hiatus in the share price due to lack of news flow in the financing and construction stage of the first project, Ayanfuri. The less advanced Tengela gold project will continue to provide exploration updates from continuous drilling, with an expectation that the million ounces already announced will increase by at least 2-3 times. We expect continual good news flow, a rerating induced by Northern Hemisphere buying and increasing takeover speculation as the numbers firm up. Perseus is trading at a 63% discount to our valuation of $2.25 a share. Perseus is our highest conviction gold share. BUY
Click to expand...

Been mentioned as a TO target doesn't make it happen though. LGL and NCM have been under the scope of the major majors for about 50 years...

PRU valued at about $20 an ounce at this stage of it's development is pretty cheap on the scale of things..
 

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A few from my basket...

ROC - Roc Oil
FLX - Felix Resources

They have both been issuing statements about takeover interests in the past 6 months. When there is smoke, there is fire... make your own judgement.

TAH - Tabcorp holding

Rumor has it that it will carved up by Crown (for its casino assets) and Tatts (for its wagering operations).

RIO - Rio Tinto

A bit from the left field. But BHP could still comeback and make a bid. The recent right offer has replaced RIO's debt with lots of equity. Now BHP can come in and replace some of those expensive equity with their own cheap debt again! Joy to the M&A and capital market bankers.
 
The oil sector looks very ripe for takeovers - mainly because they are not making any more oil and it is getting used very quickly. If you believe in peak oil (I do) the price will increase very quickly with huge profits for oil companies, subject to governments bringing in super-profits tax, of course. My picks in this sector for takeover are:

WPL - the biggest pure energy company in Australia. All ready touted in the press that BHP are looking at it

STO - second biggest pure energy company. Used to be takeover proof for legal reasons, but now changed. Great growth prospects in gas sector.

NXS - undervalued due to recent contractual and cash flow problems. Real chance of a predator coming in and taking over.

I hold all three companies
 
ENE - current price ~$2.02

They announced an indicative offer from Archer Capital in the range of $2.4-$2.8.

They also have a separate offer for some specific UK assets. This offer is priced at 10.8x full year EBITDA, and will return $1 per share in net proceeds, although only representing 13% of ENE's global generation capacity.

The UK asset offer on the table put ENE in a reasonable bargaining position with Archer. Applying the same EBITDA multiple gives a enterprise value of $1.3B, less debt of $460m, mean equity value of ~$850m. Current market cap is only $310m.

Note this assumes other company assets are of same quality as the UK ones which may or may not be true, but the margin of safety is there.

See announcement here.

http://www.asx.com.au/asxpdf/20090626/pdf/31j8397fn14fj9.pdf
http://www.asx.com.au/asxpdf/20090622/pdf/31j5dqw9gm6s2k.pdf
 
woot first post =D
(hence being new to this so go easy if im off on a few things)


Anyways moving on...

Just thought i'd note that its possible some companies (ROC comes to mind) might have been speculating about takeover offers to increase their share price prior to raising capital?

Anyways ima go for PPP as a possible TO target.

They have a solid balance sheet, very cashed up with no debt, good assests and a low share price in comparison to other smallish oil companies.

MC of 270Mil
Cash of 130Mil
 
JTLP said:
First stock to look at is: MEL
Click to expand...

While I agree that MEL is highly undervalued...

MEL is a long way from any kind of existing or proposed transmission pipeline to any potential LNG terminal (namely Gladstone or Newcastle). Therefore, my belief is that they are not as attractive a TO target as companies in the Bowen, Surat or Gunnedah basins. But I certainly could be wrong.

On to my pick:

CRM: very similar tenements in size, location, and farm-out arrangements to Gunnedah Gas, whose tenements were bought out by their farm-in partner Santos last quarter. Over 80% owned by one person who may want to cash out (speculation on my part, but I know I would!). Proximity close to ESG's developments and proposed Hunter Pipeline. I see nothing in the company's statements indicating that they wish to (or have the infrastructure to) operate their holdings.

I hold CRM, don't hold MEL at the moment but have in the past and plan to do so again soon.
 
NUF...

Potentially the chineses are sniffing around. They had a tilt at them in Nov 2008.

The strategic need probably hasn't change. But the price is halved.
 
skc said:
ENE - current price ~$2.02

They announced an indicative offer from Archer Capital in the range of $2.4-$2.8.

They also have a separate offer for some specific UK assets. This offer is priced at 10.8x full year EBITDA, and will return $1 per share in net proceeds, although only representing 13% of ENE's global generation capacity.

The UK asset offer on the table put ENE in a reasonable bargaining position with Archer. Applying the same EBITDA multiple gives a enterprise value of $1.3B, less debt of $460m, mean equity value of ~$850m. Current market cap is only $310m.

Note this assumes other company assets are of same quality as the UK ones which may or may not be true, but the margin of safety is there.

See announcement here.

http://www.asx.com.au/asxpdf/20090626/pdf/31j8397fn14fj9.pdf
http://www.asx.com.au/asxpdf/20090622/pdf/31j5dqw9gm6s2k.pdf
Click to expand...

further announcement last night that the indicative price range is the top of the range at $2.8.

ENE is now officially on the auction block with Archer capital now conducting due diligence, and several other parties being invited in as well.

History has shown that such process can lead to higher offers for share holders, as overseas players value green energy companies on a much higher mulitple than Australian investors. Look at Pacific Hydro 4-5 years back.
 
Just a personal hunch but a great under-valued stock which could be a possible take-over is BSL -(bluescope)its a stock which currently @ 2.37-2.50 is currently beneath is asset value @ 3.43(this figure was 2mths old from wbc trafer pro-research..could have moved alittle).BSL would be a premium stock in any portfolio..ive personally been accumulating the current stock..might be a bit bais..but please do your own homework before buying.But its interesting to note that BSL which is in the top asx50 has currently been trading volume in the last month in about 60-70million per day(xao)which has placed it in my watchlist as a top 20 atm..any thts plz post?
 
HOW long before someone -- Xstrata or the Chinese, most likely -- decides to take out Highlands Pacific (HIG)? By Christmas, the giant Chinese-owned Ramu project in Papua New Guinea will be operational, and HIG has an 8.56 per cent stake in a mine that will be producing 31,500 tonnes of nickel and 3300 tonnes of cobalt a year. It also has 16.9 per cent of the huge Frieda copper-gold deposit in PNG. Xstrata is spending $US36m this year alone on Frieda, a project that is expected to produce 160,000 tonnes of copper and 240,000oz of gold a year. HIG is capitalised at $68.5m and has $28m in the bank.
Click to expand...
http://www.theaustralian.news.com.au/business/story/0,,25634622-18261,00.html - the latest of several references Bromby has made to HIG in the last few months.

Lots of potential here in two good big projects with two big JV partners.

They are sitting pretty with their free-carried to production interest in the $1.3 billion Ramu project. Very nicely done indeed - all MCC's borrowings are non-recourse to the JV partners and there are nice clawbacks once the borrowings are repaid. Production due early next year.

And all the while Xstrata continue to drill the Frieda project. Again they are free carried - in this case until a decision to mine.

You would have to think that Xstrata and MCC have given this one some thought. At face value their EV is somewhat less than the value of the interest in either project. The successful bidder could flick out the interest in the other project and potentially have got something for nothing... Just a matter of time imho
 
STO

From the Business Spectator

Santos

A range of parties including Petronas, China National Offshore Oil Corporation (CNOOC), Shell, BP, AGL Energy and Apache Corporation could make hostile bids for Santos once restrictions are lifted on September 1, Dow Jones reports. The newswire service quoted analyst Di Brookman of Citigroup saying that although a 15 per cent shareholder cap was lifted by the South Australian government in November last year, companies that have since entered the Santos dataroom undertook that they would not make a hostile bid until the third quarter. Such parties include Malaysia's Petronas, which is Santos's LNG partner. Santos, which has a market cap of $10.84 billion, fell 2.43 per cent in the course of yesterday's trade.
Click to expand...
 
Mad Mel said:
MEL is a long way from any kind of existing or proposed transmission pipeline to any potential LNG terminal (namely Gladstone or Newcastle). Therefore, my belief is that they are not as attractive a TO target as companies in the Bowen, Surat or Gunnedah basins. But I certainly could be wrong.
.
Click to expand...

See my comments from the first post.... I wonder if AGL would consider MEL? Just a thought, but they took SGL and now STO have a blocking stake in ESG and OIP are a long way from certification
 
Take Over / Acquisition News or Rumours

Hi all,

Just realise we have not had any take-over / acquisition news thread in our forum. Since generally take-over will cause a bullish move, let this thread be the place where you post that kind of news (or rumours in some case, but please mention that it's still a rumour if it's so) like UMC take-over few days ago.

If possible, please post a chart and your analysis (fundamental/technical) as well to support your argument, not just "A is trying to acquire B".

Happy posting :)
 
RCI.

Has an conditional offer of 42c on the table with DD underway by some Indian firm.

RCI did have 2 offers with the other one pitched at 50c, again from India. That offer however was dropped without any explanation (yet).

RCI plummeted from 43c down to low of 33c yesterday, and now recovered to 36c. Still a good 15% below the indicative offer price.
 
My first post. Hello to all.
A share i hold and have done very well in is MAH (Macmahon Holdings). They are a construction and contract mining company. Their largest share holder is LEI. There is currently a mou where by LEI can't go above 20% without MAH approval. The mou also involves MAH being a preferred partner in projects. This mou expires Nov 2nd. The new mou won't have the takeover clause in it.
At current prices MAH would be a great pick up for LEI and with the pick up in the local and global economys there will be plenty of new work.

There you go, my first and probably longest post i'll have.

Geea.
 

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