SEH has received an all-cash takeover offer from Lone Star. The bid values the business at A$530m or A$0.25 which we believe is on the low side considering the progress SEH has made in unlocking value in its gas projects. This bid and acceptance by the SEH Board are likely to signal to the market the company is in play, and we expect other bids to emerge which may be more representative of SEH un-risked value. SEH’s JV partner’s (CNEML) parent has defaulted on a bond payment which potentially rules out a natural acquirer for SEH and may explain the smaller discount offered by Lone Star. Argonaut maintains a BUY recommendation, with a risked target price $0.24/share target price (under review) and an un-risked valuation of A$0.48
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