The company, Westside Corporation Limited, has come out to state that there is indeed a non-binding, indicative proposal with the price to be around $0.65. Seems like nothing is concrete at the moment. Discussions are on-going and the joint venture partner of Westside has given consent for revealing the confidential joint venture agreement to the bidder after both sides agreed to a confidentialy agreement.
If you look at the statements released by Westside, Misuit E&P Pty Ltd is one of their major partners in the Meridian Gas field tenemants and also the Bowen Basin tenemants. QGC is their other partner in the Bowen Basin tenemants. Neither has struck me as potential sellers of assets.
It is interesting to note that the share price has been on a decline since a major spike up to $0.57 on the 17-Feb-2012. It currently closed at $0.455.
Before we look further into the deal, lets look at the premium and drawdown
If the deal goes through at current levels, the potential returns are 42.8%. If the deal fails to materialise and say the share price goes back down to $0.25 the draw is -45.05%
From the share price, it can be inferred that the market perceives this deal, currently, to be a 50/50.
So I believe unless a deal can be struck with the join venture partners of Westside Corporation, this deal might not go through. I would stay away until more information comes to light.
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