Cenovus buys Athabasca for ~$3B..........?If you're a ATH s/h & clicked on this post......completely elated & euphoric at the possbility..... hoping that WAS the case, then i'm VERY sorry to disappoint you. You know why? Because THAT should have been the case, the reality and the actual healines & news that Athabasca mgmt SHOULD have released to end the year with a BIG BANG......BUT......Unfortunately.......for you guys.....you got this .......convoluted monstrosity below
https://finance.yahoo.com/news/athabasca-oil-announces-creation-duvernay-220400201.html
Now....i did put a question mark .....right at the end of the headline.....so folks wouldn't completely believe this was actually true or fact..........because as you all know by now.... it is not.
So WTH happened here? WHY did ATH s/h get this complicated, cobbled togther Frankensteinish mess INSTEAD of the Headline above? So basically what i'm trying to say is WHY ATH s/h got the shaft instead of getting the cash?.....Well for those of you that are inteterested to know WHY.... for this LAZY Friday, before the week-end comes along and you all got gets some R&R.....well, then just listen to what i have to day about it and MY TAKE on what possibly went down here......and whether this "DEAL" is ANY good for s/h
So really.....What THE "you know what" happened here? First, i'm gonna work on the premise that ATH has been "Up for Sale" or they had that "Up For Sale" sign for some time now. At the very least, a few months BEFORE they divested most of their conventional O&G assets, but imho i think it was even waaaay before that! So if that's the case, why didnt you guys get those $3B buckaroos.....or close to it.... and on your merry way to celebrate the upcoming holidays early with some expensive champagne or other delicioius bubbly? Two words.......ATH MGMT! That's why!
For those that don't understand or cannot grasp what i'm trying to say........let me expand a little further.....IF i may. Reading through all these posts on the ATH forum, its evident to me that most don't know squat, never have of what's really going on here. Ther might have been one or two posters (and you can scroll down & search for who those people are as i dont remember their names!), who came very close to understanding what went on here.....behind the scenes. And trust me when i tell you.....that it AINT for the betterment of ATH equity holders. Those calling for this to be a great deal for ATH s/h or for ATH to move up to $6, $7 even $8 in the future .....have ABSOLUTELY no idea WTH they are talking about and probably didnt even read the release properly.
So WHAT is this deal really? And WHO does it really benefit? Imo, it's bascially a security package for ATH mgmt/bod, a deal to secure/ensure their future eployment and those close to them... along with RETAINNG all those GREAT benefits they currently have. I have always said the the BIGGEST problem plaguing the Canadian O&G patch are folks like these, like the mgmt of Athabasca. And the arent not alone. just look at Pipeston's (RIP) former and what went down there......along with the mgmt of the acquiring comany StrathCona. All knitted from the same corrupt & greedy cloth.
Now as i've stated. i'm not a s/h here so i really don't give a rat's behind what the do in the end, but if you're a ATH s/h, especaily a long term staunch supporter of the company qho bleieved they has the s/h BEST interestes in mind.........YOU should be VERY upset and up in arms here! with this shady deal. But questionable, shady & greedy mgmt is only part of the problem that the Albertan/Canadian Oil patch has. WHY? Because what this deal does is the opposite of what the Canadian oil sector NEEDS to move forward and on par with its American counterpart, especaiily in places such as Texas. The Canadian oil patch doesn't need more smaller & usless zombie entities such as "Duvernay Energy Corp" being created.....to suck up more valuable space & resources where only mgmt benegits. They need MORE consolidation & BIGGER more efficiently driven super majors to rise up in order for Canada & Alberta to remain competive & survive
So most of you are probably asking yourselves right now, WHY didn't it happen here? And will it at some point? Imo, what this deal does, is not only secures the financial feedoms, benefits & employment of ATH mgmt BUT it doen't prevent an eventual takeover by Cenovus either. But it does delay it quite a bit. In other words, ATH is taking the LONG scenic route instead of the shortest distance between point A&B .....which is a straight line or a simply outright TO. And the ONLY reason it was done this way was for their persnal benefit. Some of you smarter folks, like myself, who were somewhat puzzeled when this news came out, the logic & reasoning behind it, asking yourselves HOW did it get to this point? Well......PLEASE let me entertain & enlighten you further of WHAT possibly could have gone down here......to get to this outcome.
My assessment or guess of what could have spurred such an outcome, is that Cenovus most likely approach Athabasca with an offer. Don't know when or how many times, but it's reasonable to assume, and quite likely as well, they did with all the events that unfolded up to now. So Cenovus mgmt probable gave them an offer, which was quickly spurned & rejected by ATH mgmt/bod as being not to their liking or to low. My guess is that CVE probably offered around $4.50 to $5 and qas quickly rejected. I wouldn't be surprised here, after all thats happened up to now and the know ing the mindset of ATH mgmt, they were looking for something north of $6....at the BARE minimum and with a spinoff included..
As the Cenovus guys are folks who usually DO NOT overpay for assets, which imo would have been a VERY RICH deal at even $5.....let alone +$6. The CVE guys refused to pay such a crazy premium ......BUT were STILL VERY interested in getting their hands on ATH's Oil Sands assets and the immediate cashflow it would provide. So after some reflection & haggling they came up with this Frakenstein montrosity of a deal which benefits ONLY mgmt in the end. They get to keep their FAT paycheck, their FAT bonuses & their cheap & plentiful options and secures their financial freedoms & employ,ment for the next few years. Beautiful right? Yep.....IF you're part of THAT group but not so great if you're s/h!
Will ATH get eventually boughtout by CVE? Yep.....because Xp'd guys like Cenovus don't go thorugh all these hopps for nothing or do all this stuff for nothing or give assets up for free or waste all this precious time & energy for NOTHING. There is a PRIZE at the end of the rainbow for them and it's ATH's Oil Sands aasets. But like i said, it's being done by taking the looooong scenic route by ensuring mgmt/bod are taking care........
Well, that's it for now. I hope folks get a better picure of what really went down here and act accorfingly by making more informed invesment decisions. In the coming days, i'll give more of my 2 cents worth of IF folks should stay invested here or look somewhere else!
BTW, sorry for some of the typos or grammatical/spelling errors. Time is short so don;t have the time to proof read and as i've stated many times......my brain works that much faster than my little hnads can type or keep up......But i'm fairly certain you guys can get by all the same.....8)
GLTA