Vero Energy Inc T.VRO

2.66

[filefish]

Lots of shares being traded on TSX at 2.66. Is that the equilibrium point and  "fair value" of this deal?

[JohnJBond]

Stripping away all the BS, I see the following facts.   A combined company with about 210 million shares.   If it were worth $3 per share, as suggested, then the value would be about $630 million   $630 million for 3900 flowing barrels.............just no way.   That would be about $160,000 per flowing barrel!   VRO is being valued at $80,000 per flowing barrel (using a bs

[JohnJBond]

Its hard to know why VRO is trading in the 2.60's or 2.70's.   Without this deal, VRO should be worth well into the $3's - with this deal, in my view it should be worth in the $1's   Reverse takeovers like this are fairly rare................usually a much more valuable private company buys a largely worthless public company.   In this case we have a largely

[filefish]

JJB, I see your logic, but how do you account for the strength of the share price today on heavy volume. Others are apparently seeing a higher valuation for the combined company or something else is going on behind the scenes.    

[Feruk]

Ok so VRO's contributing ~50 million shares, another ~30 million coming from financing. I can't figure out how many TORC is bringing to the deal though. Where do you get 130 million from?

[Feruk]

Ok found it. 213MM shares total. I think 100,000/flowing is fair valuation considering management team. That lands them at $1.92/share on "new TORC." I was gonna buy, not any more.

[JohnJBond]

Something else is going on behind the scenes in my view.   Some options include   1.    Those behind new Torc are supporting VRO's share price - why you ask?    Because the more shares they hold the more they get to vote, and if the price tanks the deal likely will be voted against.   2.   Normally, when a takeover is announced, you get volume in the 10

[JohnJBond]

Agreed.............even at $100,000 per flowing barrel its a significant loss at current prices.   The new fully diluted share amount of 213 million is what kills this deal.   VRO has about 50 million shares.............and it contributes most of the production..............VRO was forecasting 3300boe 2012 exit.   New Torc is forecasting 3900boe 2012 exit................so VRO

[filefish]

JJB, all very plausible comments... I am going to hang on to half of my holdings for now to see how this plays out. I have successfully traded in and out of this stock since its inception and just want to see it thru to the end. If TORC is indeed supporting the share price, those holdings should show up on a reporting form in due time. The more they buy on the open market under 3.00, the better

[easymoney321]

This post has been removed in accordance with Community Policy

[JohnJBond]

For those who know who I am, and are interested in such things, after I dumped my VRO, all those funds were reinvested in WFE.