RE: Kistos - White Knight21 Dec 2022 09:21
...........AA would certainly have my vote, on condition he ditches the present lot. He won't be given the chance though - that much is clear.
Harking back to many earlier posts on the subject, tax losses don't generally drive M&As. They're regarded as an asset but are invariably treated with caution for all the reasons that have been outlined and discussed on here and elsewhere. It is not a given that full use can or will be made of them, for a whole host of reasons that could be debated until the cows come home. Businesses generally change hands on maintainable earnings, backed up in the case of oil & gas by some commonly used measurements of value (volume of reserves/$pb). Every deal is different and prices generally are always infuenced by industry and market sentiment. SQZ should have been out there looking for cheap deals, given Sunak's and Hunt's viscious attack on the industry. Instead, they pay top dollar - and then some. Plus they lose control and dilute shareholders in the process.
Having reflected on matters since the announcement was made, the conclusion I have reached is that as a result of the clumsy, amateurish and (dare I say it) selfish way the directors have gone about putting together the deal that has been landed on us, the excitement as to SQZ's future potential as a provider of 5% of the UK's gas needs with a war chest that opens up almost unlimited possibilities as to future opportunities and potential performance - not least in regard to generous dividend payments - has been killed at a stroke.
Having Mercuria with a 28% (or whatever) either exercising a disproportionate level of control over events moving foward (they'd probably manage to get past 50% at every meeting, bearing in mind it's only votes cast that count when it comes to general meetings) or blocking whatever they don't like the look of, it seems to me there's a reasonably strong possibility of excessive caution being exercised by the directors for the foreseeable. They'll prob opt for whatever Mercuria favours in return for even more generous packages.
SQZ might have encouraged one or two brokers who cover the stock to publish a pro-forma P&L showing what the combined entity's performance is likely to be in the first full year of combined trading. Also some NPV numbers - making sure the assumptions used were clearly articulated. Too much to expect.
imo ACW and MF were caught napping and scared s***less by Austin's recent bid. They've jumped into bed with Mercuria (on terms most half-informed shareholders regard as verging on the ridiculous, so high a price are SQZ paying). They'll have known there'd be no turning AA away next time, armed only with insults. AA has a habit of making things happen, whether you like or dislike his style, motivation, or whatever. The SQZ boys won't have liked that. Doesn't make for a comfortable life with loadsamoney and options to boot.
all jmofwiw
dyor
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