Estseon, I don't think the market is expecting a counter-bid. I'll attempt to crunch some numbers below.
Unlike some questionable take-overs, this is a very low-risk one for shareholders. I.e. the $4.10 Baytex offer is a very safe chance of converting your $4.10 shares into $4.10 cash when all things are said and done.
However some people are clearly gambling on a small chance of a counter-bid, with a 3 cent premium (ignoring all associates risks and opportunity costs).
I'm going to give it a shot at quantifying the true premium, all things considered (simplistically anyway), going off the basis of 3.5% interest rate and a $4.70 counter-bid calibrated model.
Whilst it's a very low risk offer, if we assume there is 0% of a counter-bid, there's still the opportunity cost of interest revenues that shareholders would miss out on whilst the AUT share price idles until the late May completion.
So let's assume a current fair price (for the 0% chance of a $4.70 counter-bid scenario) of about $4.02, or let's say $4.00 considering the the tiny amount of risk of the original take-over collapsing.
Now if we assume the 100% scenario of the hypothetical $4.70 counter-bid occuring, let's give a current fair value price of $4.60, once again knocking off roughly 10 cents value (5 months of interest revenue opportunity cost from $4.10 shares @ circa 3.5% cash rate until May 2014).
Now if we divide that 13 cent premium ($4.13 subtract $4.00), by a potential 60 cent premium (4.60-4.00) (which I feel is a current fair value price of a hypotethically 100% chance $4.70 counter-bid), then 13/60 = 22%.
So if we were basing this off an assumed final counter-bid price of $4.70, then I think the market might currently give it a 22% chance of occurring.
Off-topic, it'll be sad seeing AUT disappear. I was an absolute rookie investor when I first bought into AUT, but I made some large profits from the company both financially and from a learning perspective as an investor, and it was always good seeing the company's plans unravel even after I sold the shares.
All IMHO and DYOR, this is just some back of the envelope number-crunching.
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