RE:RE:RE:Valuationkonzelmann wrote:
Well, if you run the numbers, $80,000 per flowing barrel comes to: 6000*80,000 = 480,000,000 480,000,000 - 115,000,000 = 365,000,000 365,000,000 / 47,000,000 = $7.76 So that would be a way of fundamentally supporting why we would get over $7. Realistically we may not. But it's not difficult to support why we could. I'm thinking ~$6 just because even though the fundamentals support a higher price, there is a limit to the premium that someone will offer over where the shares have been trading. Even though I can support it being worth $7.76, all a buyer has to do is point to the way Longview has traded for the past year and tell me that obviously the market is the best judge of value (efficient market and all that) and that my fundamental analysis is obviously flawed. But there's your answer as to how to support the claim of $7+.
That is one way to look at it but in my opinion a bit optimistic.
One would think that Advantage had attempted to find a buyer for Longview.
The fact that they chose to put their shares up for sale basically at the 52 week low suggests that they didn’t get much interest. The reality is that currently there are considerably more assets for sale in Western Canada then there are buyers. In short it’s a “Buyers Market”!
Now we have an UN-NAMED Bidder proposing some kind of a NON BINDING offer suggests that somebody is attempting to buy Longview at a HUGE discount to the NAV (whatever that actually is).
On Sept 2013 the BV was $5.23.
On the 2012 Annual Report the NAV was stated as $11.40 (10% discounted).
That is how the GAME is played!
Judging by where the SP is currently it appears that the market is not expecting the Premium that many of us are hoping/dreaming for or for a bidding war to break out.
Now it’s up to the “Special Committee” and the BOD to attempt to negotiate the best deal possible and ultimately for the Shareholders (most likely of two companies) to say Yes or No.
For a transaction to be successful it will have to be viewed by the Shareholders of BOTH companies to be beneficial.
For now all we can do is SPECULATE, all we know for sure is that THE GAME HAS BEGUN! How it ends is TBD!
As Always; Do Your Own Due Diligence; It’s Your Money !!