Stock price comments belowI don’t know how it can be argued that the stock prices have responded in any way to “the offer”. The market for Canadian energy stocks has been, to put it mildly, depressed and insipid. Even with the positive news of the last few months, mo one is flocking to buy small energy companies with debt issues.
If you have tracked OBE and BNE since August, it is Bonterra that led what little rise there has been; but I suggest that none of the improvement in the value of either has anything to do with Obsidian’s obsession. Obsidian’s offer to Bonterra shareholders has been rejected, and rejected again. The premise that a two-for-one share exchange was a fair price is hardly a factor in that rejection; and the idea that any trading around par might represent a premium to those who tender is laughable.
If you want to find a reason for what little trading there is in either stock, look at the short trade reports. It is not August 2020 anymore. The shorts have pretty much bailed out of Bonterra since it secured it financing; very little buying but no one is selling either, and what trading there is seems to be the remaining shorts churning as they try and find an exit point . Obsidian stock was still 1M shares shorted at the end of the last reporting period; I strongly suspect that the market being made as WTI exploded this week is driven entirely by a scramble to cover these.
And to repeat yet again (see posts below ad nauseam), there are no end of reasons for Bonterra shareholders to reject Obsidian’s offer; reasons that make any discussion of pennies on share values moot.
Obsidian’s promoters here seem obsessed with the idea that the offer would give Bonterra shareholders their only option to “get out”. This is mistaken thinking: Bonterra shares have always been a closely held by long-term owners. We may be grumpy about where we are right now, and anything is for sale at the right price, but Obsidian’s offer was never that; indeed it was never a price at all.
Bonterra has work to do to fix its balance sheet. This is going to take time and how long that will be depends on energy prices. Not as long as some would think, but you are not going to see any new investor interest in either company until their numbers improve. Confidence in management will be important too; and this is where Bonterra wins hands down.
As for being surly, you are damned right we are surly: the BS that Obsidian has generated is way past being irritating. And dealing with it is costing Bonterra real money; hard cash and attention that should have gone to fixing the balance sheet. Nothing we can do about that, but I have to wonder when Obsidian’s shareholders, who are paying even more to sustain this never-ending charade, will have had enough.