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My play may be different than others. Heres what I did several weeks ago. I added more common as traders when IOC broke $55. And added a few more traders below $60. The IOC stove is hot and buying IOC calls has been a tough thing to time we all can agree. But I did watch all the IOC option premium drain away when IOC was around $55. My choice and I posted such on this board was to buy IOC March $50 calls at $9.50. My logic was all the IOC common had to do was recover to $60 a share for me to break even. I liked that risk reward. Today I still am long those calls and a few short puts.My strategy is to capture profits on my March options as we get into the Prime Time of Feb 28th to March 4th time period. I am sure 100% that we will get leaks of information that will cause the IOC stock price to rise substanially. I think the IOC board will give an update also in early March as to what is happening and that will bullish and out short friends will continue to delever their bets.I think a losing long bidder already has plan B planned with their investment banker and things get interesting.
I ordered more ice to keep a few more cold ones around for the celebration.
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I agree 100% Ebster. We wait.
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If there s no news or significant leak before then the shorts would have a field day on the delay. Like in any negotiation, if you draw a line in the sand (ie. bids due 2/28 and announcement in 1st week of March) and then cross it there shows a significant sign of weakness. That would easily be a 5-8% dip that day alone. IOC MUST make an announcement when stated are expect a major hit.
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Hefi, usually when IBs are brought in on a bidding process they are very active in the process. So when any bid is received the appropriate IB will analyze it and make sure it is in line with requirements then look at the economics. They also interact with the bidder to be sure all is clear and understood. They then will inform management and the BOD of the facts, strengths and weaknesses. At this point in the process it likely does not take very long to go through the process, but it does take some time.
So with Feb 28th quickly approaching these final bids are ready to come in the front door. Some may already be in as indicated by Doublebagger. We know leaks will start streaming; accurate and not. The announcement will be preceded by lots of volatility. Should be fun.
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Excellent post from Hemi. Verified yesterday. Wayne Andrews will upate the market on the bids on March 6th at the RJ Confeence and the IOC Board will consider offer the week of March 11th.
Doublebagger said it this way on yahoo
t 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 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 before the signing of the definitive agreements. Just to be super clear, the most likely time for a takeover bid for InterOil is after the sell-down partner/deal is announced and before the definitive agreements are signed for the sell-down deal. It typically takes 2-3 months between deal announcement and the deal closing.
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I don't agree Hemi. It's my strong opinion that Bid contents will not be known until the deadline, which is usually 3 PM on the day of the Bid Closing.
Every Bid I've ever been involved with in the Oil, Gas and PetChem industry (be it under $1 Million or over $1 Billion) had strict rules on when the sealed Binding Bids can be opened and viewed by the Owners/ Advisors.
The Bids cannot be opened until the deadline because the opportunity/ temptation then exists for the viewers to inform the contents of the Bids to the folks who have not yet submitted their Packages.
My question is .... 3 PM on February 28 in which Time Zone?
I've been thinking Singapore, which would be 2 AM New York time on February 28
This would give IOC enough time to know a few details before the CC.
