Member Info for Fevertreeman

So that is my 5 to watch

Wise advice Col Drake. IN terms of JtD's post, I was actually asking a genuine question as a long-term holder of AMEr, I regard myself as a seasoned investor rather than a 'pump n dump' merchant. For what its worth here are some other companies I have on my watch list:
1. De La Rue: dreadful management, litany of woes but a business with significant technical knowhow, a great brand, and international coverage. Will either recover organically or get taken out
2. ITV: an undervalued franchise which at some point under Carolyn McCall will start to get traction. Not out of the woods at this price as a lot of sceptics around the competitive landscape but a snip in my view
3. Genel: the making of a decent investment case assuming the region doesn't burst into flames
4. Strix: great little company
5. President O&G: suffering from the curse of Malcolm Graham Wood, disinterest in Junior Oil, and Argentinian connection but decent management team and made a lot of progress last 12 months
These are all on my watch list but I have yet to dip my toes in as funds are tied up in among others Amer

Assuming that that this does happen at a comfortable, cheering premium, and one is looking to recycle the cash into other E&P stocks or small cap businesses has anyone any thoughts about which companies? I will kick off with a couple

1. Genel
2. Renewi

1. I have helped draft dozens of these types of statements over the year for companies, and this is standard fare. In effect the co. is saying: "Look things are progressing , the process is underway, we have a lot of interest, everyone is getting access to the data room, shareholders should just sit tight...."
2. "Multiple" is a very vague term but suggests to me more at least 5 who are wanting to register their interest and have access to the data room.....now some of these will just fade away and there is no guarantee that those left standing will meet the valuation the BoD wants but it does sound promising.
3. Col Drake is right about M&P but I think they are now somewhat neutered thanks to the ongoing process. They have provided a valuation floor so it would be silly of them to continue to publicly front run the process imho. Also no one is going to take majority paper so they will need to up the cash element to stand any chance of being in the final frame.
4. The sp could easily move above 20p as I suspect all the loose stock around bar day traders has been mopped up

Gary

I fear that GC is definitely pushing for an exit as is the CFO. With global growth slowing and an incipient trade war brewing at a time when equity markets are at an all time high and the cost of borrowing virtually nil, what better time for GC and the FD to pull stumps. Not sure about JW but if an all cash bid at a decent price is put on the table there will be no hanging around. I don't see there is an appetite within the team to delay things, partly because most of the Board want out and partly because the world is likely to be a very different place in 12 months time and I think that GC was already sniffing the change in the winds before M&P, and their fortuitous arrival has enabled him to move to the end game.

As Pickedpeck correctly said the M&P proposal of 17p(12p shares+5p cash) provides a valuation floor. CPO5 is of course the current jewel in the Crown and in a sense the easiest to offload. One would have thought that the Indians will have something in the commercials about Amer's holding in the event of a change of control but who knows. Sorting out CPO5 separately from the rest of the business would seem a logical step to me given they are minority partners. Also it's been a huge focus of JW's time the effect of which has imho been to hold back development elsewhere, and as we know from the well programme the acceleration we all hoped for just hasn't happened.

Ex CPO5 the prize is a perfectly formed E&P with a lot of virgin acreage, producing wells and a wholly-owned pipeline to get the stuff out, no debt and substantial local knowledge and connections with government in a relatively stable country with a lot of potential. Reproducing that from scratch would cost a huge amount in time, money and resources, so strategically buying Amer is the perfect shortcut into Colombia for new entrants to LatAm or for existing players wanting to boost their presence in Colombia. If my analysis is correct, then one assumes the BoD recognise Amer's strategic value to a bigger operator and are developing their plans accordingly. its anyone's guess what price a big operator puts on a rare asset like Amer but I do think we'll end up having a couple of bidders in the frame. I don't think this will include the Indians as I very much doubt their decision making processes are geared up to M&A transactions and I think their main focus would be on buying out Amer's stake in CPO5. That does however leave the field pretty wide open

Fingers crossed we long suffering fundamental share pickers aren't led up the garden path again by our less than impressive BoD

15.05

If it is taking a pummelling makes it even less likely that a share and cash offer will be accepted.

Great post. In my experience though, once the for sale flag is hoisted over a company by its BoD, then that is usually that. if the BoD were genuinely aware of sensible commercial interest in the business then it was a rational move to open it up to all-comers. if on the other hand they were taking a punt and had received no interest in the business before the French approach then it is a high stakes move. Personally I don't see GC as gambling on his nest egg, so I think its the former. My firm view is Amer won't remain as a listed company once the process is over; if I am wrong then our team will have seriously screwed up.

I don't see an MBO - who would want our BoD. If P/E want it then tit will be because they can see a profitable way to transform Amer into a major indy in Colombia & that they can bring the management and resources to bear to make that happen.

In the event of a formal bid, key shareholders may well b given a heads up normally the evening before but all very carefully controlled.

I think that's called inside information!

So far we don't have a formal bid tabled hence the share price drift

Not far-fetched at all. It would have to be (1) All cash bid (2) provide elegant premium exit for shareholders incl most of the board; why keep GC the FD etc...only worth retaining management in Colombia (3) Price tag would need to tally with pronouncements from JW etc... otherwise cue howls of protest. I think its a possibility but lets wait and see

I think there was a big hint about the Board's preference for hard cash in the rejection press release, where they talked about M&P's approach being:
"not at a level, nor in a form, that merited further consideration."

The sp hasn't moved above the M&P offer because we don't yet have a formal bid on the table, so we are in the phoney war period...our lot are (a)reappraising valuations model (b) talking with potential third parties (c) drafting documents (d0 watching cricket

I have no idea what the eventual take-out price will be, or whether indeed pursuing a sale of the individual parts will yield a better sp return than an outright sale. What I am clear from my own M&A experience and watching this unfurl is:
1. Amer has strategic value beyond its current production profile, and a lot of companies will be running the slide-rule - no one had M&P on the radar as a potential suitor.
2. The game is up for management: hard to row back from strategic review announcement, and return to status quo ante. Meaning it isn't about arguing that their strategic vision is superior, fighting for jobs etc .It is now all about extracting maximum cash value for the business
3. I think that suitors will want an agreed deal. So scenario could be : BOD announce an agreed deal and recommend to shareholders which then prompts another party to put in a higher offer which sets in train an auction. Fully expect M&P to come back with a 'proper offer'.
4. Cash offer will triumph over Cash and Paper as who wants to hold overseas paper.
5. This has a long way to run

A number of posters have suggested that this will be done and dusted within weeks, which ignores the fact that this becomes a formal process with a number of well rehearsed dance steps. Having been through a few myself, I can assure you that this will likely run for months if we get competing formal bids. So points on the timetable:

1. M&P announcement is not a FIRM OFFER under Rule 2.7 of the Takeover Code so M&P now has 28 days either to announce a firm offer or walk away. (TAKES US TO END OF AUGUST)

2. They ANNOUNCE A FORMAL OFFER : they have up to 28 days to post FORMAL OFFER DOCUMENT to shareholders. (TAKES US TO END SEPT)
3. Day Zero - POSTING OF THE FORMAL OFFER DOCUMENT SETS CLOCK TICKING FOR TAKEOVER TIMETABLE
4. Day 14 - latest date for Amer send its first defence documents to shareholders
5. Day 21 - earliest closing date for acceptances of M&P offer
5. Day 39 - last date for Amer to publish material new information (OCTOBER/NOV)
6. Day 46 - last date for M&P to send out a revised offer document (NOV)
6. Day 60 -midnight; latest time for Offer to be declared unconditional ...unless Panel grants an extension (NOV)

My point is that all you peeps should relax a tad and let this thing play out. Assume that M&P will launch a formal offer and watch others come on board, so this will run into the Autumn if we just get one formal offer and longer if we have others jump on board.

My basic message is this is going to take a while to play out and there will be lulls in activity and the sp will wax and wane accordingly. However the genie is now out of the bottle and we are not going back to the status quo ante in terms of the sp pre M&P intervention....