RE: RE: RE: NAE trading at a slight discount...HMM "PGF pays .07 cents per month, NAE pays .05 cents except you'll get only .86 of a share off PFG so dollar wise it's no better. I'd be just as happy to keep my NAE shares - and make no deal."
Canonball - not sure I follow your math. For each NAE share we get 0.86 of a PGF share. Each PGF share pays 0.07/mo dividend so 0.86 of a PGF share pays a monthily dividend of 0.0602 (0.07 X 0.86). So, dollar wise each former NAE share will end up receiving a monthly dividend 0.0602 instead of 0.05, an increase of which I calculate to be a 20.4% over the current NAE dividend rate.
That being said, I am stil not very happy with the proposed deal with PGF. NAE just chopped their dividend on January 11 from 0.07/mo to 0.05/mo, a reduction of 28.6%. Had they not done this everyone would be crying foul abouthe proposed deal with PGF. The thing is the cut from 0.07 to 0.05 was sold to the shareholders as being a conservative approach to strengthen the balance sheet.
Here the exact wording from the press release:
NAL's 2012 plan targets a dividend payout ratio of approximately 35 percent of current year cash flow. This objective balances the development of the Corporation's extensive inventory of light oil opportunities, maintains a competitive dividend and retains financial flexibility.
In light of the current weak natural gas price and uncertain economic outlook for 2012, the Board of Directors has decided to reduce NAL's monthly dividend to
per share from
per share effective with the January dividend payable in February, 2012.
Here's the lnk: https://www.nalenergy.com/News/Press-Releases/Press-Release-Details/2012/NAL-Announces-2012-Guidance1127896/default.aspx
I can't believe that talks between PGF and NAE were not going on before the NAE dividend cut was announced. There was plenty of discussion before the cut about it being a possibility and I have to wonder where those rumours came from. My opinion is that the divident cut was made to facilitate the deal with PGF and make it look like a good deal for NAE shareholders.
If the NAE dividend cut had not been made then it would probably have been necessary to offer at least one share of PGF for one share of NAE. Sweeter than what's on the table but still not that good a deal for a takeover.
Right now, I am not convined that the NAE Board of Directors isacting in the best interest of their shareholders. It almost seems if the the price of NAE stock was driven down by the rumours of a possible divient cut, then the cut was made seemingly in response to the market's lack of confidence in NAE and then after a reasonable amount of time was allowed to pass along came the proposition from PGF. I'll confess to a bias here as my average cost is well above the exchange price for the PGF shares.
If I look back at the deal for the former Daylight Energy at least there was a reasonable premium paid to the shareholders, even if there was activity before that to push the price downward.
Joining PGF may be fine in the longer term for a merged company but it seems unfair in the short term to the NAE shareholders. if this had been a foreign takeover attempt I don't think it would have had any chance of flying with such a small premium being offered.
I hold a little more than 10,000 NAE shares and I'm with you, I'll not be voting in favour of the PGF deal.