Eric Nuttall was on Market Call on BNN yesterday and for the first time in years, his top pick was a drilling company, Precision Drilling (PD). This sent the other drilling companies up today, including Akita (+5.81%), TCW (+3.33%), ESI (+6.9%), STEP (+4.53%) and PD (+7.22%). Of course, Eric’s Energy fund is so big that it cannot invest in Akita, as it is too small. But Eric recognizes how extremely undervalued the drillers currently are. This may be the spark needed to ignite a rally in Akita and the other drillers.
One factor that Eric may have figured into his calculations is Precision Drilling also has roughly half the shares of Akita ; that's a lot of torque if demand for shares picks up and has more name recognition.
The industry tide isn't going out.
One comment of Eric's worth noting the last time he was on bnn, although it was directed at oil companies, it would equally apply to service companies like Akita. They're just too dam small to get noticed by fund managers like him so their valuations will always be much less than the larger better known companies like Precision, CNQ, etc. His suggestion was that smaller oils should merge and get bigger and noticed. I would equally suggest this to Akita management. In Akita's case, the dual voting shares are also another detriment to the share price. The Southern family controls 100% of the votes with 15% of the equity. No one could even take a run at Akita without their concent so the share price also reflects this situation. I do own a substantial number of shares so I hope eventually something happens so that the share price is not forever stuck at $1.5.
You know who I think would be strongly interested in buying AKITA (if Southern family was on board) would be Savanna Drilling which is owned by Total Energy Services - TOT. It would probably be an all stock deal but I feel that company is managed very well, pays a regualr dividend, could really use the tax losses carried forward and plus, it would fit pretty well with their current operations. Just my opinion, but a great idea for all parties concerned I think, if the exchange was correct.
I looked at Total and thought the same thing myself. Lol I'd be good with an all stock deal. I own 1.5% of Akita and not looking to exit the business, but to be in a larger dividend paying company. I'm from Calgary and would attend their AGM and give management a grilling on the subject, but I'm outside of Canada until June. My shares are non voting so carry no weight, but at least they'd get that shareholders aren't happy. I hope some of them read this BB.
In the meantime, if you own that much of the company (1.5% = 600,000 shares), I would contact Daniel Halyk of Total Energy Services directly and do the same with Colin Dease, along with both of the Southern sisters of our company, perhaps by email first, and let them all know how you feel about this matter. You could further advise them that many other current AKT.A shareholders feel the same way. It could be a win-win-win for all parties concerned and I believe the majority of other AKT.A shareholders would also be on board with a decent deal (proper share exchange ratio). Why wait. Start the ball rolling. I can provide you with direct email addresses to those parties if you can’t find them yourself – just message me directly. I have had many conversations with Daniel in the past and consider him a smart fair businessman and a great company manager. He also looks after his shareholders very well. Good to hear from you and good luck if you decide to pursue this matter further. I am here to help you in any way possible.
I would like to hear from TOT shareholders or even management about what they would think about such a possible deal???
Angles