Chinook Energy Inc. Common CNKEF

Back to business as usual

[PeterM1]

A couple days ago someone on the Iron Bridge Resources (IBR) Stockhouse Board wondered if there had been a “side deal” endorsing the sale of IBR to Velvet. This sort of unsubstantiated rumour of back room goings on always seem to come up when deals go down. Next someone will be pointing to some of interesting goings on at Chinook Energy (CKE) and coming up with some crazy conspiracy theories there as well.  All this is quite ridiculous. 

 

Now admittedly it did come as a bit of surprise to see IBR suddenly accept such a modest increase on Velvets original “low ball” offer of .75c. The whole focus of this contest was of course  IBR  Montney land in Gold Creek which its predecessor, RMB,  had acquired from Chinook in 2016. Velvet wanted to add this land to their holdings which they in turn had also acquired from Chinook in 2017. At .75 Velvet was offering about $1,300 an acre for this land which IBR valued at $3,500. So it was quite a surprise to see IBR  let it go for about $1,500 an acre. Still thats quite a bit more than $836 an acre -  which is the value the market puts on Chinooks 55,300 net acres of Montney land - and CKE has a lot more other stuff going for it besides their land.

 

Velvets original offer was made in May 2018 and things stayed pretty quiet for a while with IBR price hovering around the bid level. Meanwhile things were also pretty quiet over at Chinook  with its price hovering around the 20c level with very little volume to show for it - about 50,000 a day. Then suddenly mid July things seemed to perk up. Not only did we we see IBR price sliding a bit   -  down about  2 % to .74  but also some sudden high volume in CKE (598,805) and its price going up 17.5% to .235c. Out of no where, a mysterious bidder had appeared for CKE who was now buying almost every day almost everything on offer at a price below .25c I did not add up the total volume bought at this time but it could (at a complete guess) been as high as 4 million. Most curious of all was the dominant buyers broker - UBS (15 - Union Bank of Switzerland)  who to my knowledge had never in recent memory shown its face on either the CKE buy or sell columns. Now the conspiracy types will immediately say AH HA and point out that the principal shareholders in Velvet are the international groups of Warburg Pincus and  Trilantic Capital.  Quite ridiculous of course to make that association. Dont forget that Bison (lead shareholder in IBR)  itself has a 12% holding in Chinook. If there is any link in all this it could lead that way as well. Chances are that this mysterious buyer was totally unconnected to either or both of the contestants or their shareholders.  Anyway as suddenly as UBS appeared - and a week or so before IBR / Bison capitulated -  UBS disappeared - never to be seen again. The CKE price sank back down to about 21c and the volumes went back to their usual lethargic levels. I am sure that was just a coincidence as well. Conspiracy theories can really get out of hand sometimes.