Salamander Energy Share Discussion Threads

[salpara111] 05/12/2014 17:09

The logical conclusion is that the deal with OPHR is not going to happen.
The question that then remains is....what is a fair price without a takeover in the offing. All other oilers have been hammered over the last month.

[nigelpm] 05/12/2014 15:39

Exactly Lonhro. Surprised arbitrage funds haven't started to close the gap which right now is huge.

[lonrho] 05/12/2014 15:34

pineapple

why would I buy ophir and sell Salamander, if I buy salamander at 64p I effectively assuming it goes through get Ophir at £1.12 against a share price of £1.30 or so.

[salpara111] 05/12/2014 15:32

So, why is SMDR still falling when OPHR is not?

[pineapple1] 05/12/2014 14:59

If i want ot have exposure to OPHR i can buy their shares at this level and sell SMDR obviously. SONA is streets ahead and its in cash. The integration risk transfers to OPHR it does not dissapear.
imho

[lonrho] 05/12/2014 12:44

prob not but they have got about 27% representing shareholders and directors who say they are going to vote against it. Also there will be a lot of new arbitrage shareholders who will vote against it if the ophir offer differential stays at current levels.

[nigelpm] 05/12/2014 12:43

I'd much prefer the OPHR deal. Takes out a lot of risk going forward.

[ed 123] 05/12/2014 12:35

Yes, but it's a very good deal for Salamander shareholders. Would you vote against it? I wouldn't.

[lonrho] 05/12/2014 12:32

to drop the sona deal it only requires the salamander shareholders to vote against it.

[ed 123] 05/12/2014 12:04

This no-news lull is sapping the confidence of some. My guess is that there's a delay because Salamander are trying to get SONA to put the 40% Bualuang offer to a vote of its own shareholders. The deal with Ophir requires the dropping of the SONA offer. In view of the drop in the oil price it's unlikely that sufficient SONA shareholders will want to proceed, imv. If SONA follow CEPSA and walk away, then the Ophir offer can be put to a simple vote of both sets of shareholders. The management and some big shareholders of both sides have pledged support. The most likely outcome here is that the Ophir paper offer gets sufficient support and completes - but for the time being I think the SONA issue is an unwanted nuisance (to Salamander/Ophir managements).

[nigelpm] 05/12/2014 11:45

I don't think you have cyan. Oil price fall, lack of trust in mgmt, fun and games around bids.

Numbers stack up.

[cyan] 05/12/2014 11:44

This share price is shocking! Little chance of £2.50 by Christmas now. I better do more detailed number crunching here before possibly buying; have I missed something?

[nigelpm] 05/12/2014 11:35

That's quite a good point pineapple1 except for the major problem that that would bring CEPSA and others into the game.

It would make perfect sense though if CEPSA have definitely gone away - so perhaps they have.

[pineapple1] 05/12/2014 11:23

The cynic in me believes its orchestrated so that SMDR share holders perceive they have a premium if the deal is finalised with OPHR.Alternativily OPHR want to keep their paper and walk away....

[lonrho] 05/12/2014 11:02

Just topped up, ok net debt was high at the the half year at $400m but second half operating cash flow should be $200m and operating costs per barrel were $18 in the first half and should reduce in the second half. This is being priced as though there will be no deal and in that event the company is on its way to going bust.Oil prices would have to be a lot lower than this to justify the current share price and the company has some built in protection as the SRB tax %age reduces as the oil price goes down.

[tiswas] 05/12/2014 11:01

That's pretty clear to me that 65p is a rip roaring bargain.

That's why I would be "happy" to take OPHR shares if no cash offers as should benefit from OPHR share price recovery in time and the fact that they are hopefully getting a bargain.

[nigelpm] 05/12/2014 11:00

Of course in the short term it could go to 45/50p first.

[nigelpm] 05/12/2014 10:57

Clearly, CEPSA thought it cheap enough to make an initial offer at 120p + contingent amounts.

That's pretty clear to me that 65p is a rip roaring bargain.

[speedsgh] 05/12/2014 10:56

nigel - "So CEPSA won't be interested at £1? 90p? 80p?"

We keep hearing how cheap SMDR is at this level, yet the share price continues to fall away into oblivion + no one (CEPSA/SONA/A.N.Other) seems willing to step in to trump the plainly carp OPHR offer.

[nigelpm] 05/12/2014 10:56

Sure, that's true tiswas. However, I'd be sure there's some risk premium in OPHR's price. There's SMDR's debt to pay off for a start.

I totally agree with everything else you've said.

Feels like some hedge funds having a bit of fun in an illiquid market to me.

[tiswas] 05/12/2014 10:53

I am not sure about that last one Nigel. It implies that both boards and certain shareholders are completely wrong about the "compelling" reasons for doing the deal and as OPHR are offering paper not cash the cost of the deal to them has fallen considerably from the initial price they were happy with. Not like DGO and PCI at all, should think it is a good deal for OPHR shareholders?

I would say that the OPHR offer will not be withdrawn, barring Armageddon, but as for anything else I do not have a clue!

[nigelpm] 05/12/2014 10:45

Also, if OPHR deal was off - OPHR price would leap.

[nigelpm] 05/12/2014 10:44

simples? Really? So CEPSA won't be interested at £1? 90p? 80p?

I don't buy that.

[speedsgh] 05/12/2014 10:42

Market is thinking... all deals off... SMDR stuck with inept, self-serving BOD... simples... aimho