'jft310' pid='22866' datel Wrote:If I were a fund share owner and I found the fund manager sold something that was worth well more than $400 in 2-3 years(monetization of the assets with a CSP) for $150 today I would see he was fired . Fiduciary respondsibility cuts both ways short and long term. Everyone wants a deal and thats a start on proper valuation work(gets those short term fund owners off your back) and then to drill more prospects and with those drilling results we can get a better resource estimate and then can get a Net Present Value for IOC based on the new assets. With this first deal closed and FIDed IOC is worth quite a bit more. Drill several more wells and we can talk takeover then. Or the two spike theory works for me.
Three years ago you said it would be over $400 by now. You have also told us we would be getting 2 XOM shares for part of E/A. You have told us IOC has received takeover offers in the past, but they were “verbal” therefore never presented to shareholders. So when you said “they voted those top 10 to not sell the company” that is not true. Maybe to BoD voted not to sell (in the past) but shareholders have never had a vote on a buyout.
I am looking at the real world. Right now IOC is taking bids for xx% of E/A at a price of $y.yy per mcf. We don’t know what x or y are, but currently z (IOC stock) is $92.34. Any buyer in the real world is looking to buy at the lowest cost they can. There are also a limited number of buyers because the PNG government is making the rules. Bidders might be going back and forth and y might be going up. When they buyers see the total cost of x% vs. the cost of z*T (where T is a takeover premium) the buyers are at a tipping point. Do I raise my bid to outbid one other buyer, do I buy the whole company, or do I walk away? So like it or not, InterOil is for sale. As the old joke goes, now we are negotiating price.
Shareholders buy stocks to make money. 7 of the top 10 shareholders are in the business to make money for other people. If given the choice they might be willing to sell at a 50-70% premium to today’s price vs. waiting and hoping for an unknown down the road. Three to five years is a long time in this economy. With the heave concentration of shareholders, IOC stock maybe has become a one way ticket. The only way some shareholder will be able to exit, is a complete buyout of the company. As I said, InterOil is for sale.