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Sasa where do you get £22 from. Per the RNS 'Accordingly, unrestricted cash balances at the same date amounted to US$ 289.8 million, equivalent to approximately 1,789 pence per RockRose Share'
My understanding is that there is no unrestricted cash set aside for decommisioning liabilities hence this needs to be factored in when looking at the deal.
Hi danawinner - well, if they have bought that crucial 15% of the float already this morning, you're ahead of me, then, so well spotted. If that is the case, then it does alter the dynamics of the situation, quite obviously... sasa.
Which makes AA et al 'U' turn look all the more unfathomable.
But on the other hand, Covid vaccine and SA et al working together to restore POO and the drop off of supply, £37/share could be on the mark again this time next year.
MISCARRY the 37 valuation was pre covid and oil price collapse?
Investor - the latest cash figure (circa £22 ps) was ex - the decom costs (known as unrestricted cash) and those prospective liabilities have been pushed out further, anyway - by two years or so, if memory serves, so that's a bit of a 'red herring' at this stage.
I think that AA's decision, as by far the largest shareholder with just under the 30% level, is borne out of frustration by him of the mkt's failure to properly recognise RRE's worth and going 'private' would nullify that handicap at a stroke.
However, selling such an undervalued enterprise at below even its cash level looks foolhardy to me, as it pays scant regard to the interests of the other shareholders. Moreover, letting it go 'for a song' affords an opportunity for a more proactive operator to step into the ring here or to prevent that happening, getting this offer upped to at least the cash level currently applicable.
Maybe, a more efficient operator like Serica could now be looking at this sudden opportunity to utilise its cash hoard after trying to find an attractive deal, on value grounds rather than simply a production boost, as they've recently re - iterated; its mkt cap is higher than RRE's, so no RTO probs if they do decide to intervene.
As I posted earlier, 'it 'ain't over until it's over' and we're a while away from that right now. Just my take on this currently, anyway - sasa.
MTS,
Agree, with deals like this PI's never get to know the whole story. Need to follow AA to see where he ends up as that may give a clue why AA et al, think that doing a massive 'U' TURN for an offer of 1850p is acceptable. Be interesting too, seeing what NS deals are done by others in the coming months. My guess is you have not seen the last of Arab backed PE / PRIVATE companies making inroads into the NS.
aimo
Sasa. It looks to me like they have bought 15% or so of the company this morning, giving them circa 50%.
They need to get to 75% for it to be irrefutable, but unless they are planning to give some extra sweeties to their friends and relatives, in a couple of weeks, I think that it is a stick-on at £18.50 and it may or not worth be worth holding out.
Let us suppose that you manage to get an extra 15% from AA, I wonder whether it is worth the wait, imho.
I took some more Serica and TXP this morning, and they are already moving ahead, but probably a spike from like-minded reinvestors.
Good luck all, only annoyed that I top-sliced a couple of thousand last week. Bugger.
AND I missed out on a spread-bet last Friday as I was too busy. Ah well, count your blesings.
NewKOTB I just think this deal is a kick in the teeth coming today, when markets are booming, Oil up, Gas up, even Dutch TTF is up and climbing. What do you think?
"Totally agree sasa. I am not selling my 11,000 shares yet, £18.50 is a fking insult...."
Well we have a big buyer atm, able to sell my holding straight to market, no NT or need to breakdown into smaller tranches.
Investor81 the broker valuation of RRE post Marathon deal was £37/sh
sasa and sparky you dont know what todays cash position is! Or do you?
Why are you also ignoring the large decommisioning liabilities?
Totally agree sasa. I am not selling my 11,000 shares yet, £18.50 is a fking insult.
Today's RNS is thought provoking, to say the least! That AA and the BoD have agreed to it speaks volumes about AA being thoroughly brassed off about how low the mkt valued his business, bearing in mind the agreed offer accounts for only 85% of the cash already in the bank with nothing attributed to its business ops and future earning power.
Just about anything can be massaged in the company accounts, except for the cash on deposit as that's verified by a 3rd party - the bank statement corroborating that item. To that extent, one's encouraged that the 'all cash' offer, such as it is, looks secure enough at this stage.
However, there's a way to go yet for this to go through (over 50% of votes in favour need to be achieved to gain control and only 35% has been secured so far) - ergo, there's a chance that a counter offer might yet be seen; a decent improvement in the terms is normally required to rescind management's acceptance of the first offer and a 15% hike in the £18.50 price currently to, say, £22 ps would merely equate to the cash held with the business in 'for free' even now.
Although the temptation for recent buyers to take their profits here while still available, is understandable, it might not be over yet. A counter bid equating to what's already in the bank would seem difficult for the BoD to defend, since it avoids any difference of opinion of what the existing business is worth today or might the outlook for it might be!
As it's early days regarding this deal, there seems no need to sell just yet - yes, it might well go through in the event but something more realistic might yet be seen, who knows? Even an improvement on the existing terms to reflect the £22 cash figure looks possible if that 50% + voting acceptance figure looks threatened.
Just my initial reaction, fwiw - sasa.