Does Mr Market like the merger?Looking at Market Cap alone, the two companies had a combined M.C. of $143,M before the merger was announced (based on 30 cent NGN and 27 cent CRK share price). After the merger was announced, the MC of CRK alone rose to $147,M. Might this indicate that we approved of the merger?
The 37 cents per share we've been quoted is a useless number as it is based on a NGN value of 30 cents. The true metric is the 1.228 shares of Newco for each share of NGN. If the MC of NewCo remains at $147 M then the 636 M shares of Newco become worth 23 cents or 28.4 cents per current CRK share (I've ignored the 1:5 rollback).
If Mr Market likes the new company with greater exposure to capital markets and future mergers then the equity raise should be at a premium to our current share price. A market cap of $200,M would valuate our currents shares at approximately 35 cents after the PP. This is less than 50% of the MC of LSG who produce slightly fewer ounces than CRK.