Yesterday I decdied to sell some more established holdings, and use the funds to by WFT between 3.95 and 4.
I think its an excellent entry point. In my view, the share price has fallen as a result of a few people who wanted something else, dumping in protest. Their loss is my gain. I suspect they are looking at trees, and failing to notice the forest.
In answer to the question Why? In my view, this merger is part of a larger plan. Its worth keeping in mind that the Chinese offer for Nexen took about a year to finalize, and consisted of several steps, ending in the cash offer.
I strongly suspect this merger is part of a similar larger plan...................afterall, why would WFE's mgmt, go for such an apparently inferior offer, when they could have accepted $7-8 in cash elsewhere.
The Chinese would much rather buy one larger company at a premium, than try for two smaller companies at a discount. The Chinese can only buy so many Canadian Companies, before thier rich offers start meeting political oposition.
In my view, there is probably a larger deal in the works...................ie merge WFE with another undervalued company.............result in double the production, and 6 - 12 months later, recieve an offer of 70,000-100,000 per flowing barrel from an eager Chinese buyer. If I were managing WFE, and had been unable to get $12 per share in the last few months, but I was given a means to getting a $12 offer in 2 or 3 quarters, I`d agree to a merger like this - no doubt about it.
I`d know it would cause some short term share price issues, but I`d also know the outcome would more than make up for it.
In strange situations like this, its important to see the forest, rather than focus on the trees.