Good Morning,
BG Group, the favoured long oil and gas play of the goliaths, has finally accepted a cash and share offer, albeit this wasn't the rumoured
Exxon but Royal Dutch Shell (RDSA). The deal, at today's prices, will make any
interested party think twice before making an offer.
The offer is rich 'enough' allowing for the blend of assets,
Egypt and Australia plus deep water opportunity and increasing market share in LNG. BG's cashflow for the future justifies the premium and will not be ignored by the big fish!
RDSA now becomes the real bet and favoured over BP et al
(save for M&A there but unlikely with litigation on-going). One cannot see
any shareholder rejecting this offer. Its borderline rich and only a fool would
consider voting this down.
Its one M&A action where it may just be worth holding
the stock until the paint is dry, as two companies with plenty dry powder may
just see future value above and beyond 1350 pence (383 pence cash and 0.4454
Shell B Shares). At the price, any offer is very unlikely, but...never say
never. So entirely contradictory of the above, all stock was sold today! A greater believer in taking the money now, rather than the hope!
Staying in sector, with the gossip Gulf Keystone (GKP) just
about to be 'part of a deal', with company being very tight-lipped,
Malcy's assertions look
to be bang on the money. Some interesting moves to wash away the Easter
fat!
We had Centamin Egypt (CEY) Q1
production report, without many concerns and bang on the money. CEY at
some point need to change. With a suggestion of grades improving towards the
end of this year and guidance back to 450K ounces per annum, there should be
some improvement in broker opinion. The outlook, although marred by litigation
and failed joint ventures has not done the company much good. Perhaps it’s time
for a change of management at CEY. With no indication of costs, one assumes CEY
have improved on the previous quarter/half by circa 6%.
The iron ore producers had a mini-celebration with a
common-sense assumption up to 15mpta of iron ore have disappeared off the
market. For those following the saga, EMC had not appreciated that had Atlas
got South West Creek up and running the cash costs would have been a not too
shady, $42/t. Something that isn't that enticing in the current market but
longer-term for bondholders there's some 'hope.'
Sirius Minerals (SXX) announced the results of their potato crop trials last week (8th
April), the benefits to 'key crops is not to be ignored nor are the capital
requirements. SXX will be viable, although one should consider not going all
in, more so buying over time.
With some friends around Hatton Garden commenting on the
news crews in the locality reporting on the heist, it’s nice to see a
Forensic Chemist wanting to apply to be a Jason Statham extra for
the impending film. A few pounds lost might improve your chances Adrian! One can look forward to hearing about what was left behind,
if its like previous robberies, laundered cash, guns and odd narcotic
will be the flavour of the day! One hopes they had adequate insurance and expect
some knock on benefits as dealers and jewellers restock.
Atb Fraser
