RE:RE:RE:RE:RE:Volatility Yes for those who have worked in the back room of an investment, bank or broker, you will know that these deals get hammered out weeks before they transact. The final detail is the price which starts as a range, and then ultimately gets finalized in the days or sometimes the day right before the deal is formally announced.
They have had the buyer/group of buyers for sometime now.These deals take quite a bit of work.
This will be a bit of a headwind when posted as the price is probably going to be in the low 4s. The recent rash of insider buying will probably offset that negative news.
Lots to like here for those who can see it and have courage and patience.
HeavyBanana wrote: riski wrote: Yes, this is what I was referring to. The buyer of the block would want to get a price that is low as possible. They have likely been identified as the buyer for a month or more and found a situation where the price of what they were after was falling. They could happily allocate some time and resources to helping that share price fall a little more than what was already happening in the panic which gives them a much better price on their block purchase.
This is referred to as overhang after merger or buyout. There are a number of reasons for overhang, but this is one possibility.
Never waste a crisis.
HeavyBanana wrote: Juniper bought into Penn Virginia to the tune of $188,000,000 (which included Juniper throwing in Rocky Creek assets) for a 59% stake in Penn Virginia. Penn Virginia then acquires Lonestar and rebrands the whole chitteroo as Ranger Oil.
So to Riski's point, the acquirer of the next Juniper block, if it were to be disposed at the earliest by Juniper would be welcomed by them at a depressed price (motive) upon signing the agreement.
As for Juniper, obviously the higher the price the better upon structuring the block trade but at the end of the day if they simply want to lower their exposure in a rebalancing of portfolio exercise, then it would seem plausible that they would sign the deal even at the current level as they are well in the money from their initial investment into Penn Virginia.
No where near a loss for them.
I may be wrong about this but from my cursory look, that's the way it appears.
The first block transacted for US$211,040,494.50 which was materially above their initial investment stake in Ranger.
The balance of their shares in Baytex provide pure profit for that early investment in Ranger.
Even at US$3.20 they pocket US$160,000,000 and that is 100% profit, so in aggregate the two sales would have doubled their money from their initial Ranger stake and they still have the third block of pure profit to hold or sell.
TD's last note referenced the next Juniper disposition seemingly as a foregone conclusion, suggesting they have some intel on a block trade agreement having being made for the second block.