ARX/VII is at least 10$ per share - probably more soonThis is an excellent deal that combines a conservative company (ARX) and a company with a bit too much debt (VII). It delivers nice cost savings and provides ARX with more torque.
(Posted in the ARX board but I figure this might fit here too now.)
With an investment grade stamp and RBC/CIBC backing, they will be able to print debt at 2% instead of 7% (Tourmaline notes are at 2%). Based on cash flow and debt, I estimated that each share of ARX/VII is worth around 45% of a Tourmaline share (closest competitor now), which is around 10$ per share.
However, I think there is a bigger story there (IMHO); that the big funds will soon be all over this and that the share price increases we recently saw are only starting for TOU and ARX/VII. With ESG being so important nowadays, I think many funds are looking to divest from big oil and will happily move into investment-grade environmentally-friendly natgas entities.
This might put pressure on the smaller players too (PEY, AAV, BIR), as it appears that big money is ready to get in, provided they can be big enough to attract mutual fund money that won't go into small companies.