BlackPearl Resources Inc. BLKPF

MEG s/h are up 20%+, PXX s/h are down 8%

[pablo87]

So despite all the turmoil in the markets and WCS, MEG shareholders are still up over 20% compared to the pre-offer share price. Whereas PXX shareholders are down 8% (from $1.29 to $1.19).

On that comparative basis, PXX should be trading at least $1.60.  Moreover, we know HSE is going to need to come up with a better offer.  So the concept of $1.85 offer for PXX shares is reasonable on a comparative basis. The implementation however is not (reasonable).

[Schreibzey]

Pablo, I agree. As per the link below, "since the exchange ratio is fixed, the number of shares the acquirer must issue is known, but the dollar value of the deal is uncertain," This means, without a dollar value attached, PXX assets are taken for nothing. Further, I ran my own financial model and my new shares, post-merger, will include diluted ownership to the tune of being cut in

[Schreibzey]

One other point I forgot to make: As shrewd as the Lundin crowd is, you have to think they knew existing IPC shareholders would jump ship, further reducing IPC stock price. The lower the IPC price goes before merger, the lower PXX assets cost them. Being a majority holder, I highly doubt their ownership % is being diluted  

[ariesleaf]

So what your saying is the more shares of pxx we have the more we get of IPCO so after the exchange when IPCO goes up we make our money. So it is best to by more PXX now with IPCO shares also down.

[Schreibzey]

Not exactly. As with any stock, the higher it goes, the more you make. That's not the issue. The issue is that your enterprise ownership value (post merger) is being cut in half and PXX assets are being ripped off. If you buy more shares now, you're signing up for a 50% cut in enterprise value. In my opinion, you can mitigate risk by buying IPC post merger...at least then dilution will be

[ariesleaf]

So if we buy today IPCO:ca at $5.62 and after pxx exchange we hold if IPCO:ca goes back to 52wk High $9.35 we will make money.? (JUN 08/18)