My Thoughts20 Jul 2019 22:47
For what it's worth, like many others I suspected something was brewing with the management not buying more cheap shares (insider restrictions) and the big trades reported after the end of each session. It's bitter sweet as it's a back handed acceptance that the BoD have failed, though again many of us thought it and yet opens up the chance of a big pay-out, I believe they have probably run out of road with key shareholders losing patience, probably had to concede to Michinoko who where allegedly considering voting against the BoD recently.
I have been calling for a strategic review for some time and did so recently so I'm pleased as it was part of what I suggested they should to sort our the SP - some poster suggested I was wrong - share buyback, review etc, so I feel vindicated.
WRT price, you can forget dismantling the assets and rebuilding to generate a price, it's no longer valid. The suitors will set the price based on what they feel they can create and it will be considerably better than Amerisur BoD have achieved, crucially combined with what they feel they can get away with.
This is not a distressed, fire sale, type disposal, so Amerisur are negotiating from a position of strength, with many financially strong companies expanding in Colombia the only missing ingredient for a great price is a competitive bidding process. So the RNS has set the stage by telling every interested party to expect competition - i.e. bargain hunters need not apply. Here's a few obvious names, there are many more I sure including new entrants who have now been alerted: Occidental, ONGC, Geo Park, Fonterra. Gran Tierra.
I think the BoD hand has probably been forced by getting an offer or offers worthy of consideration and perhaps a suitors that threatened to go hostile if they didn't more it along. Some have suggested it could all be settled in a few weeks, personally I would not be surprised if we a several months away and the longer it goes on the better the chances of a high price.
WRT, to the question of examples attaining 2 times value, there are examples but I would highlight one in particular because it was a Canadian oil company bought out by a Swedish oil co. I don't remember all details but I recall it because it was an all share deal and they where sniffing around a company I was invested in. My point is, I think most posters have not considered a partial or all shares deal to create a fantastic Colombian based company, the predator could pay a hefty premium that they could not otherwise stretch to. Remember Amerisur paid for some of their acquisitions partially in shares, and Occidental is doing the same for Anadarko. We could get rid of these bozos and be shareholders in Geo Park of GTE even with a nice pay out to boot. Both are undervalued and could make the asset work much harder. I would be very disappointed under 30p cash, but 30p equivalent in GTE shares would be acceptable to me giving real upside.
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