RE:RE:Should CJ Be Interested In GXE?Okay the market cap is $235M but you won't get it at face value so $275M to buy them up if they agree to a 20% premium and then at your $40M FCF forecast 2 years to pay that off. No new shares issued and a .01 cent div increase to CJ share holders bringing it up to $.07 per month or $.84 per year making the yield just over 11% per year. Oddly enough GXE has over 1.5 times more shares than CJ so the div hit isn't even as bad as going back to the whole penny per month.
I am not sure I like the idea of a partner over eating it all and selling off the the parts that don't fit, if any, to someone else.
You are looking at quintupling the debt for roughly a one fifth revenue increase. 2 year payout seems good though and that is without an asset sale.
But would GXE shareholder's or even management approve it? I guess CJ could float it first.
GLTY and all
JayBanks wrote: Could we not pick up all of GXE and maybe split it with someone else just taking on the areas that work well with us? Lower the acquisition costs, premium or no premium... and I'd rather take it on debt than shares...
I have no real interest in being debt free unless there is no sensible acquisition opportunities. I like leverage that makes sence, let the experts of the company use thier expertise in growing my investment here... I'll pay the bank a cut if I can make a higher return rate, the safety of being in a debt free position is overrated. Being debt free means you have no better ideas for growth.
We could up our production number, and with our FCF it wouldn't take long to eat that debt (I'm seeing $235M market cap currently), we are likely going to see 20-30M free cashflow go to just our debt at this $85-90/Oil... up the dividend a penny (as that's what they were paying monthly at a lower oil price) and if thier lands are any good maybe we can crush 25-40M FCF to the debts per quarter from the extra production.