RE: RE: RE: Some of the posts Thought some of you might appreciate this observation and opinion I posted to PCE recently. Hope the 'No' vote goes through, (my 70,000 shares went 'against' by the way), and that Fred and company at PCE are ousted following the failure of this suspiciously motivated 'merger' in favour of more intelligent and competent management who take shareholder's interests into consideration in unlocking value. I can't speak for AVF, but CHX is not worth anything going forward, and PCE is extremely undervalued relative to NAV.
I find it fascinating that under the terms of the prospectus whereby Provident's upstream business was combined with Midnight to creat Pace in 2010, executives of Provident received $5,300,000 in severance and $10,900,000 in shares or options, while the execs at Midnight, as the new managers of the business at Pace, got no compensation other than a continuing paycheck from Pace. Excerpt from the terms of arrangement in 2010:
"Provident has employment agreements with four senior officers pursuant to which Provident has paid, or will become obligated to pay, upon completion of the Arrangement, a retiring allowance of between 1.5 and 2 times such officer's current annual salary, an amount under Provident's short term incentive plan, plus an additional amount for loss of benefits and perquisites, as a result of the transactions provided for in the Arrangement and the decision by Provident to rationalize and ultimately dispose of its oil and gas business. The aggregate payments in respect of these amounts under such executive contracts total approximately $5.3 million. The executive employment agreements also provide for the acceleration of the vesting of unit awards granted to these four officers under Provident's long term incentive plan as a result of the Arrangement, which has resulted or will result in the payment by Provident to such officers of approximately $10.9 million.
Midnight does not currently have any employment agreements in place with its senior officers with the anticipation that the industry standard approach would be approved at the time of any transaction in which severance obligations may be triggered. It is not contemplated that the transactions contemplated by the Arrangement will result in any severance obligations to senior officers or management of Midnight. However, Midnight expects to pay amounts under its short term incentive plan as bonuses in connection with the Arrangement in accordance with normal industry peer guidelines."
Now, fast forward to today, simply replace "Midnight" with "Charger" and "Provident" with "Pace" and the flip flop deals look eerily similar with Charger executives, including Buchanan, not receiving severance but having a job going forward in the latest transaction. On the backs of shareholders' value in the enterprise, millions being paid out (from cash flow, debt or credit facilities), in the first transaction to pay severance to one group, and, then, 2.5 years later, the others return the favour. Nice work if you can get it! Total expenses of the Provident Midnight arrangement were also around $25,000,000.
So why is Buchanan buying a half million worth of Pace shares, as I presume he can't vote them? Just that Pace is desperately undervalued? What more do these fellows have up their sleeves?
Fool me once, shame on you. Fool me twice, shame on me. IMHO.
Look forward to your thoughts. WKH