Post by
BlueCollar51 on Mar 03, 2014 11:45am
IT’S ALL RELATIVE
I have noticed that when an ALL SHARE OFFER is announced it usually goes something like this.
Company A offers Company B some number of shares for some number of shares.
Based on the Average Closing SPs of both companies over some period of time this represents a premium of some %.
The Average Closing Prices from Jan 02 to Feb 28 2014 inclusive for;
Surge (SGY) = $6.28
Longview (LNV) = $4.86
Based on that; a 1 for 1 offer would represent a premium of abt. 29.2% for the Longview Shareholders.
All kinds of arguments can be made that Longview is undervalued vs. Surge. The REALITY is that when Advantage chose to sell their shares at $4.45 a very low starting value for a takeover offer was established.
The fact that they did that suggests that there was NOT a long line up of interested potential purchasers for Longview. It’s a Buyers’ Market! Motivated Sellers are at a Disadvantage!
Surge (Paul Colburn) saw an opportunity to acquire some very good assets at a bargain price and has jumped on it.
I am a believer of Recognising Reality and making Pragmatic Decisions.
If and when we get a Firm Offer I will evaluated it and when the time comes vote my shares accordingly. The result will be whatever it is and I will deal with it. That’s all a Retail Shareholder can do.
I have a position in LNV (ACB $5.25)
For now the only thing for me to do is to stay CALM, attempt to ignore the NOISE, wait and see what DEVLOPS and do whatever I think is best for me.
As Always; Do Your Own Due Diligence; It’s Your Money !!
Comment by
jd43xl on Mar 03, 2014 1:01pm
At today's share price, investors get a sustainable 9% dividend. I don't see much to be concerned about. Upside is well over $6, and what is the downside? Not much.
Comment by
Seppelt on Mar 03, 2014 5:03pm
Good advise BlueCollar 'to stay CALM'... But what would you do if you were a shareholder of both, LNV and SGY, and had about $50K cash to spend?