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+--- Thread: A bit more color.... (/showthread.php?tid=2814)
A bit more color.... - doublebagger448 - 02-17-2013
Just a bit more color....
Let me begin by being clear about the final bid date. The final bid date is NOT changing. It is Feb 28th. The bidders are still tweaking, refining, enhancing their bids. Each bid will require a thorough financial analysis by the bankers using a standardized framework across all the bidders. The modeling and analysis process will take some time, even with the bankers working nearly 24/7. There are numerous variables contained in each bid: the percentage of the LNG plant IOC will own, whether there is a cost overrun guarantee provided by the bidder (this is VERY valuable to IOC), amount of cash upfront and the percentage paid on signing the definitive agreements vs. various milestones, exploration options beyond E/A and the economics around new resources, etc., etc.. All of this analysis needs to be done for each the 4-6 bids coming in. Given the complexity and the total dollars involved, the IBs will need AT LEAST 1.5 weeks to complete the bid analysis for each bid and get fairness opinions drafted and signed off and make day-long presentations to the IOC Board. Anyone that says otherwise either has not been through these processes (I have been through several as a principal) and/or does not understand the legal standards an IB must meet in order to satisfy the standard of care (as an attorney with 15+ years of M&A and transactional experience involving public companies, I do). Hence, the EARLIEST you should expect the IOC Board to meet is March 9-10. If there is a clear winner, you could hear an announcement from InterOil the week of March 11th.
Chatter is that the bid process is extremely active and the 4 conforming bidders are highly engaged, eager and focused on winning. This is why you saw the stock move up over the last week. Some of the shorts located in Australia have better access to real-time information/developments and have concluded the deal is going to happen and it will be quite favorable for IOC. That said, I would not be surprised, if either of the 2 non-conforming entities (both SMs) make a takeover offer for 100% of InterOil between now through the signing of the definitive agreements.
Strength and honor....
RE: A bit more color.... - Palm - 02-17-2013
Thanks DB! Great info. All is lining up. I agree on the timetable and have March 15 set as a "by" date to allow for this action on the bids.
RE: A bit more color.... - efi426hemi - 02-17-2013
'doublebagger448' pid='17477' datel Wrote:Just a bit more color....
Let me begin by being clear about the final bid date. The final bid date is NOT changing. It is Feb 28th. The bidders are still tweaking, refining, enhancing their bids. Each bid will require a thorough financial analysis by the bankers using a standardized framework across all the bidders. The modeling and analysis process will take some time, even with the bankers working nearly 24/7. There are numerous variables contained in each bid: the percentage of the LNG plant IOC will own, whether there is a cost overrun guarantee provided by the bidder (this is VERY valuable to IOC), amount of cash upfront and the percentage paid on signing the definitive agreements vs. various milestones, exploration options beyond E/A and the economics around new resources, etc., etc.. All of this analysis needs to be done for each the 4-6 bids coming in. Given the complexity and the total dollars involved, the IBs will need AT LEAST 1.5 weeks to complete the bid analysis for each bid and get fairness opinions drafted and signed off and make day-long presentations to the IOC Board. Anyone that says otherwise either has not been through these processes (I have been through several as a principal) and/or does not understand the legal standards an IB must meet in order to satisfy the standard of care (as an attorney with 15+ years of M&A and transactional experience involving public companies, I do). Hence, the EARLIEST you should expect the IOC Board to meet is March 9-10. If there is a clear winner, you could hear an announcement from InterOil the week of March 11th.
Chatter is that the bid process is extremely active and the 4 conforming bidders are highly engaged, eager and focused on winning. This is why you saw the stock move up over the last week. Some of the shorts located in Australia have better access to real-time information/developments and have concluded the deal is going to happen and it will be quite favorable for IOC. That said, I would not be surprised, if either of the 2 non-conforming entities (both SMs) make a takeover offer for 100% of InterOil between now through the signing of the definitive agreements.
Strength and honor....
Appreciate you taking the time DB, some nice color there, thanx.
RE: A bit more color.... - ArtM72 - 02-17-2013
I have no knowledge of what is going on but suspect the structure of each proposal has already been seen. A limited number of modules might be added but its a good bet the interests of the bidders have ready been reflected in prior proposals. What ncan be expected to change is the numbers. This argues for a decision within the first two weeks is closing. If there is anywhere a delay might occur it is with the govt, but I bet O'neil and crew are hot to trot.
RE: A bit more color.... - ebster123 - 02-17-2013
IOC management should not (I hope more like WOULD not) attempt to place a deadline unless they knew the government was inboard with all potential candidates. I also believe, as stated, that any delay (even if it is positive in the long run) will be met with a negative slam UNLESS there is a leak of solid information and a solid reason. I also believe there is high likelihood of a takeover attempt before March 8th and possibly sooner. If IOC inks a deal whomever attempts a takeover after the inking should have to honor the inked deal (right?) hence, if a takeover happens before then they can do with the assets what they want. Time will tell....Good luck longs!!!
RE: A bit more color.... - admin - 02-17-2013
Thanks DB. Very helpful and very nice to see you back here.
RE: A bit more color.... - Petro2458 - 02-17-2013
Very good post. I do wonder why IOC would be so specific about the news release and BoD meeting in first week of march. I can only conclude that the framework is well organized and has progressed to the point that "final binding" bids will not materially change in structure, thus making the subsequent selection process more timely.
After all this time... Another week will not be material to the long term.
"Separately, InterOil announced that it has advised bidders with which the Company has been in discussions that the final binding bid solicitation period for the partnering process currently being undertaken will close on February 28, 2013. The InterOil Board of Directors intends to meet the Company’s advisors during the first week of March 2013 for the purpose of evaluating bids received and selecting our partner(s) for the development of the Gulf LNG Project utilising gas from the Elk and Antelope fields in Papua New Guinea.