HDR hardman resources limited

September Quarterly - WPL's friendly holding , page-2

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    Apologies - I hit Enter before adding the post. Here it is:

    The HDR September Quarterly Report has little that is "news", but the Corporate Activity section provides the first statement regarding WPL's blocking stake that I have seen. Have a look on the web site for the full details, but in summary it says:

    "The terms of the original placement to Woodside dated July 2001 have been renewed for a period of a further two years. One of the conditions of the agreement is that Woodside will not increase its shareholding in Hardman to more than 20% during the next twelve month period, except in the event of a takeover bid for Hardman by a third party or a change of control".

    The "news" here for me is that the "no takeover" agreement has been renewed (I assumed it was but hadn't seen it stated). The agreement has been renewed for a "further two years" - although it seems from the wording that the "no takeover" clause currently applies for only 12 months. I presume (although the wording is a bit unclear) that the 12 months is from July 2002.

    I think that this forum's general consensus is that WPL could not justify a takeover of HDR in the short to medium term anyway and that it is happy to be big brother until closer to production or at least until after firm reserves are established for this year's and probably next year's drilling targets.

    I also note that HDR is planning to hand out lots of options to new staff and the new director (to be approved at the AGM), exercisable at $1.10 (like a lot of the options held by long-term staff and directors) with a December 2004 expiry. That date is nicely beyond the 2 year agreement with WPL, so I think we might be able to deduce from this that 1) the price will be well above $1.10 by December 2004, and 2) a takeover move by WPL is most likely after July 2004.

    So, we should have an independent HDR for some time - able to increase shareholder wealth, unless a third party sees them as undervalued and makes a bid in which case we should get fair value from the ensuing bidding auction.

    Its going to be a long road, and it has been already for those that got in early, so patience is the name of the game.

    Any thoughts or comments?


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