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I'm going to play devils advocate for the sake of debate:
If your one of the remaining bidders do you worry less about putting forth your "best offer" bc of where the current pps is. What I mean by that is this; lets say Company X has so far put in a bid for $1.25 (please don't read into that price I'm just picking out a random number) but they have decided internally that they are willing to pay $2. Does this company now say listen we are going to stick by our current offer bc either 1) we get the asset for a great price or 2) we lose out and can just go buy out the whole company at a slight premium. Normally I don't think this option would be on the table but bc essentially all of the value of IOC is in E/A according to the market they most likely could pick the whole company up for not much more than their offer price.
Thoughts???
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May be hard to predict but know for a fact that one of those bigs listed by Hemi does not react to ST price movements unless something has changed with he LT (and by that I don't mean a few months) fundamentals of the company. They are a more than 5 year outlook firm and have a group of around 25 who meet regularly. They talk regularly with management. It takes something pretty big for them to go negative because they put a lot of time in making the decision to get in in the first place. IF they decide to make a move out, they do it very gradually. This firm has changed its holding very little since getting in. Hard to see right now that they would think things are materially fundamentally worse today than a year ago.
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Palm-You are referring to Cap research. Fidelity is the weak link I think. They loan shares and react short term. Wells isn't going anywhere. RC is firm.
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Lib- There is a window here for a buyout I agree. Its short but its here.When IOC has all the approvals and the sell down complete and with a Feb 2013 GLJ report with these new finds quantified I think the risk goes away until right before the first train opens. If I were management thats when I would get serious about a buyout.
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With O'Neill in office, NEC approval, and the low share price, theoretically IOC is very much in play. Where in the world can you find a certified resource of this size with Tricertaops, PPL 236 and other prospects likely making the ultimate upsaide far greater. 9 TRILLION is just the start. However, there is the rub. What I hear is IOC management would be very reluctant to agree to any deal that did not give substantial value to the additional prospects. So the question is would anyone making a hostile offer give value for those prospects?
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One solution sell all of E/A to the winning bidder.IOC keeps the rest.Final price for E/A paid out over time as assets are produced.The more thats there the more IOC gets paid. This removes the asset size debate.
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Right now most IOC holders feel like Charlie Brown trying to kick that football. This time it is going to be different we said. Lucy will allow us to kick a field goal in 2012 after pulling the ball from us in 2010 and 2011. We got a real good running start this time and it’s going to happen (IOC over $90) only to have the ball pulled from us yet again, and splat: flat on our backs at $50.
If someone came along and offered to replace Lucy as the holder, I bet more than a few shareholders would be willing.
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I have often said if I was the CEO of Interoil I would sell full interest in E/A...let Shell work with PNG on 2nd LNG project....and fund my aggressive exploration program. I have tremendous confidence in IOC's exploration abilities. I think what they've accomplished is amazing and it's just the tip of the iceberg. If IOC were to drill additional prospects aggresively, I have no doubt in 2-5 years they would have found enough gas to support many LNG trains. Perhaps the appropriate strategy is to do both at present......
