RE:RE:RE:RE:Vote no to this....Londoner7 wrote: Kensho,
You seem to dismiss the possibility that a poor response to the tender doesn't prompt Delek to raise the offer. Why?
It was made clear in the circular that the final results will be published before the end of March. Separately the BOD stated that we will get an update on Stella with the results. Delek will know through their board representation the current performance, we're now one month on from first oil, and Delek has formalised the bid at C$1.95. So I guess the news is okay or better.
So I can await that outcome. The bid doesn't close until 20th April. That is what I meant by no downside. Okay barring something very unusual, like Delek withdrawing the bid.
But what is more relevant is the reaction of the major minority holders. If Cavendish and Artmis say game over then so be it. Until then I'm not swayed by posters on a UK BB or elsewhere, even Stockhouse ;-)
I'd hoped for a raised offer at this stage but the current fall in the oil sector has worked in Delek's favour. Clearly, others felt the same or have been frightened by BB wittering, hence the higher volume on the sell side. But I've said before, I'm happy to see weak hands sell out to stronger hands who I guess see the situation different to you.
I'm in no rush to move my funds out and attempt to catch a falling knife in the oil sector. I don't know what it's like your side of the pond but this side North Sea players have been hammered over the last couple of weeks. Today was ugly and I'm glad I'm not involved. Ithaca is my only play in the sector.
All the best,
Londoner7
Londoner, sorry for not responding until now. Been out of town and
sporadic web service. In answer to your question, NO I do not think Delek will alter the offer
, or at least not to a level that will appease those like yourself who feel like it is seriously low. As I know you know, but I will state it anyway, Delek also has a BOD to answer to and making an offer far beyond the range that has been calibrated by an independent consult (First Energy $1.60 - $2.10) will, in my opinion, simply not fly for the Delek owners and their BOD.
Now, could they go up to the $2.10 mark? Sure maybe. BUT, what if they don't and they choose to walk and then wait for IAE to really begin to flounder in this seriously low oil price era and simply wait for an opportunity to make another offer at an even lower price. Or simply walk and never look back. Remeber, if they did that they would be uloading all their own shares.
On the one hand, again, obviously in my opinion, there is a possible 7.7% upside to voting NO, whereas, there is a significantly lower downside. And how low do you think the share price would sink if there were a No vote and Delek walks? You will see the market overreact and the IAE share price could easily touch $1.35 CND maybe even lower. We've already seen this playout with this company in 2012, and they didn't even have an offer that time. I guarantee you that the market will absolutely turn on the IAE management if Delek walks. They will be seen as once again, fumbling the ball on a sale. Would the share price stay there? Probably not. But if you believe in the company and its prospects then you would have missed a glorius opportunity to sell high and rebuy low and all for a paltry 7.7% gain.
In my mind it seems incredibly foolish to be holding to vote NO and not a sound business decision.