Everyone loves a good takeover battle, but the sparring over Pacific Internet is getting a little tedious – largely because so little has happened.

The reason for this is largely that PacNet does not seem to have any strategy other than to wait for a higher price to be offered. And as we’ve seen, that strategy is coming to its inevitable end.

Consider the facts.

MediaRing announced on February 27 that it was going to make an offer for PacNet, but not until it got the relevant regulatory and shareholder approval.

Those didn’t come through until April 26 – two months later!

If PacNet talked to potential counterbidders during that time, they seemingly weren’t prepared to pay US$8.25 – otherwise such a rival bid would have already been forthcoming before MediaRing even officially launched its bid.

Another month passed before, on May 24, MediaRing’s formal offer arrived in the letter boxes of the shareholders. Vantage Corp, for one, took another week to confirm their rejection of the offer.

Another three weeks passed before MediaRing finally raised its offer price to S$9.50, valid until July 10.

Critically, it declared that offer final – meaning it cannot now raise its bid again if PacNet shareholders to continue to reject it.

The problem for those shareholders is that US$9.50 is below the US$10-US$12 per share valuation KPMG gave it.

I have no reason to doubt KPMG’s methodology or impartiality. It would be as impartial as any of the big financial advisory houses, when advising paying clients how much their company is worth.

But the fact is that no matter what anyone says PacNet is worth – if the market says that PacNet is only worth so-and-so much, then that is all the stock is worth.

That’s the difference between value and price.

We all like to think we, our houses, our cars and our stocks are worth a lot.

But if the market disagrees we can either take what’s on offer or leave it.

In the absence of a higher offer from a rival bidder, PacNet will face the same choice. But increasingly, that choice is being made for it.

Look at the current stockprice: US$9.37! In other words, the market last Friday night priced it 13 cents below the offer price.

The last time the market priced it at these levels was two years ago, and until MediaRing’s offer came around seemed to be stuck between US$6 and US$7 for at least a year.

In the aftermath of the tech bubble it was worth less than US$2.

Tan Tong Hai – now at Singapore Computer Systems – has done an excellent job of turning PacNet around, but how much more could he do with the company?!

As an observer, it seems to make a lot of sense to merge with MediaRing, given their seemingly complementary offerings.

My personal prediction is the shareholders who will turn up to the annual general meeting on June 30 at 3pm at the Singapore Science Park will agree with me.

Like management, they might also prefer to hold out to a higher price.

But like me, they might also come to the realisation that a similar offer might be at least another year away, if not longer.

As for management, my prediction is that come July 10 PacNet will either have accepted the offer (most likely scenario, in my opinion) or the following Monday the stock is going to plunge back to its earlier pre-MediaRing price.

If there are any white nights coming to the rescue, they’d better have a fast horse and bags of gold in the saddle.

Mark Laudi