What you are saying is that cnooc's first and most important concern is wpx's shareholders and not its own.
Why would they go to such lengths to protect wpx's shareholders?
Why split the profit?
Wpx has nothing IMHO to bring to the project except the land/resource/project.
Never in the history of the stock market has there ever been anything even close to what you are proposing.
A major company giving/lending $4Billion to a junior for a fractional stake. It has never happened anywhere before. But with Wpx it will be different?
So to be clear on this. A "shelf" company funded by 2 Chinese companies that have rich parents pays $32m for 20% of Wpx.
To secure a further 29% of Wpx, rather than pay say $48m for it, which is e same rate as they paid for the first 20%, they are willing to put up $4 BILLION and give it to a management team that has burnt through almost twice as much cash as their neighbour Karnalyte.
Cnooc is willing to trust a management team with zero potash mining experience, one that has never built or designed a potash facility before with $4B. Trust that it won't go over budget, no operational risks. All this for 49% of the profit?
When all they would have to do is take over the whole thing for pocket change, Fly in their own people and control and reap 100% of the profit.
This is nothing more imho than a long dated option on The direction and supply of potash.
They get that option for a measly $32m.
The analyst see this clearly, but not the shareholders.
Ask yourself this, why (apart from CBCHC) is their virtually no institutional ownership in Wpx? If its such a great deal why don't the big fund managers hold it?
https://quote.morningstar.ca/Quicktakes/owners/MajorShareholders.aspx?t=WPX®ion=CAN&culture=en-CA
1% institutional ownership versus 55% for Krn .
Why is that? Surely if this is going to $2, forget the $15, the institutions would want a share of that pot of gold.
When and where is there one example of anything like this happening?
A company with a $120m market cap receiving a benevolent loan of $4 B.
"That isn’t to say the Harper government is against foreign investment. Although Harper has capped the threshold at $330 million for SOE takeovers, he is raising the threshold to $1 billion over the next four years for all other takeover bids. Harper hasn’t completely slammed the door on SOEs – they can still own non-controlling shares of Canadian companies. For investors this is a good sign, but until there is clearer framework the net benefit test creates uncertainty for foreign investors."
https://www.ratesupermarket.ca/blog/canada-approves-cnooc-nexen-takeover/
The rules allow for a foreign state company to take over a company valued at less than $330m, which would have been 4 times the market cap of Wpx prior to the 20% purchase.
If they were really serious about funding a mine they could have bought Wpx for under $200m in this market.
Why do they need wpx's management? None of them have potash mining experience.
None of them have done solution mining before. Why not bring in their own team, control the direction and reap all the profit.
They love profit in china, they love controlling and securing a resource. Clearly the time is now according to the Harper governments rules to purchase all of a mine for under the $330m rule. They clearly would not be allowed do it when, if as you say Wpx becomes a multi Billion dollar company worth $15 a share.
Maybe Cnooc is changeling their business plan. Perhaps they want to model it after the Bill and Melissa Gates foundation where they donate money to Wpx.
Seriously, when this plays out the way I think it will, none of you can say you weren't warned. It has been spelled out for you.