Winners and LosersViewpoints of 6 Groups Of People
Long Time Holders Who Sell
Harvest a Tax Loss for 2024 or 2025
Move on or re-invest into Gear money 30 days after selling
Option to Vote No or Yes if you buy back in soon enough
Probable exclusion in a Class Action suit against Gears Board
No bragging rights the you stood up to a bad deal
Some Lessons learned
Long Time Holders who Hold and Vote NO
Pain of holding a down stock and possibly having to accept sale terms deal approved
Participation in possible Class Action Suit Against Board
Ability to file as a Dissenting Shareholder which must be reported to Cenovus and addressed
Yes vote is quite possible and keeping Gear and participating in expulsion of current Board
Stock probably returns to pre-proposal levels and possibly dividend re-instated
Another suit shows up suddenly with a much btter deal
Bragging rights that you stood up to bad deal
Many lessons learned
Gear Board / Offers If Deal Approved by SHAREHOLDERS
Recieve Change Of Control benefits as stated in their compensation packages
Lose current share options in Gear
Ability to alot themselves new options in NewCo at much better terms
NewCo will be flush with cash at the start so no problem paying their new salaries
If NewCo share price drop initially then they can grant themselves new cheap options
at that point and allow new large investors in who will scoop up cheap shares
from the dis-illusion who were forced to accept the deal
Probably get to keep all their jobs in a much smaller NewCo
Bragging rights that they took care of Number One alright - shareholders lost
but we live to fight another day and do it again possiblly
Cenovus - If deal approved by SHAREHOLDERS
Obtain rights to use up to 600 million in tax losses from alamagated Gear Energy worth
approx. $150M CDN (if they are in a approx 25% Tax bracket)
3,700 bbls/day of profitable heavy oil production and maybe other associtaed land rights
Total condireation payed to Gear is $110M so bascially Cenovus is being paid
up to $40M CDN at end of day to take Gears heavy Oil operations and land
off Gears hands.
Bragging rights on Friday nights to others in oil patch on how it is done
Finacial Advisors To Deal- If is Approved (Peters & Co. and Others)
Receive Transaction Costs - i heard other costs of deal of up to $7M ???
Bragging Rights - Misssion Accomplished without ruffling to many feathers in the financial world
- i.e. it was mainly retail money that was lost
Revenue Canada
Has to swallow approx. $150M in potential Cenvus Tax in short term vs. losing the
same amount to Gear over 10 years or so.
Possibily of recovering some of that since Cenovus is also into refining and
things like asphalt processing which may preclude/delay use of some of Gears Tax Pools