RE: RE: RE: RE: RE: RE: RE: NAE Taken Out I liked NAL because I felt they would at the very least maintain thier div first and foremost... That would give me downside protection. so to me this is low risk because management had made the tough decision by cutting the div and spending within thier means. PGF has yet to lear that lesson IMHO as I said in my earlier post.
this deal is terrable if your a holder of NAL... PGF has to do something drastic to get thier spending under control thier Payout ratio is 146%.. and 113% including the drip, which still dilutes the share holder.. maybe with this aquisition it will lower it by a point or 2 as NAL's POR was 99% and 93% including drip.
thier basic POR including capex and Div is 146%!!!!! They are using the drip to get it down to 113%!!! But that is diluting you, not to mention the div payment will increase every month.
I am not disputing thier ability to ability to borrow, but if you are a current holder you should be very concerend about thier spending habits, becaue if they cut capex then prod growth will slow and if they cut div the stock will drop dramatically. Selling assets in order to mainatin spending could be construde as a poor decision as well as they will cut thier long term prospects and potential growth... why did they buy them in the first place.
Like I said earlier PGF got a great deal omly 9% premium and no out of pocket cash... If it was cash I could understand the small premium but using paper the min offer should have been 15% premium but 20% would have been better... At this premium the POR with no cuts in capex should drop at lest by 5% but I'm sure they can squeeze some savings just but cutting head office duplication etc... which might get them to that point but they will still need more fiscal responsability. For me I do not trust PGF management with my money, because they don't get basic counting let alone accounting. I am not encouraging you all to do the same just bored this morning and sharing my thoughts on this.... Everyone has thier own thought and risk tolerance and to take a poker saying... Its your money and you can play it however you like!!!
Good Investing!!!
Lightning
disclosure.. I are knot 2 smmrt, ;-) Also I have made at least the same amount of bad decisions investing as good decisions.