TSX:HSE.PR.B - Post by User
Post by
Number13on Nov 17, 2020 8:45pm
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Post# 31919682
Preferred Shares - Clarification
Preferred Shares - Clarification
Raging Bull - I think my previous post clarify everything. ALL THE OPTIONS ARE PRESENTED BELOW.
What happens if the vote fails (i.e. the pref share holders vote no)?? - the merger cannot happen, the prefs would stay as Husky prefs, all assets must be held separatly, and HSE would be a wholly owned subsisiary of Cenovus with separate filing requirements. This is not what Cenovus wants as it destroys the value of merging the companies. (separate Husky employees, assets, financing, etc etc, not good for Cenovus).
Alternatively, Cenovus and Husky can merger fully, but the merged company has to GUARENTEE the prefs, making them essentially into bonds. If you can have a pref with the security of a bond, the price of the pref should increase substantally. If the merged company has to guarentee them, well, it might as well just buy them back for $25. And there would be a good chance that would happen, or, something like $24 like the RONA deal.