Let's face facts apart from the dividends this company has been a complete dog. The only decent offer they ever got they rejected. It's like bad news comes in threes 1. the rejected belter of an offer at around 450p 2. the Tailwind purchase basically taking on more debt and constant maintenance issues affecting production 3. Now this debt bomb reverse takeover. |
I'm sure you can guess what the predictive text changed for me |
Yazzie is a miserable fit, bh. Never seen a single positive post from him on ANY board. |
It is impossible to state who iscgetting the better deal unless or until the terms are known.Atvthis stage there is no formal offer.
At sone point, information will trickle and the market might get acsense of any prefrential outcone. Based on volumes traded thus far there has been no significant leak.
Novice punters are reading far too much into the short term modest gyrations. |
Totally irrelevant. |
Looking at the 2 share prices this evening, would it be a possibility that Enquest might do a 1 for 10 consolidation to make the merger seem a better fit, or would that be irrelevant? |
The fact that the share price of both companies has risen suggests that there is some synergy in the merger. But what is it? Does big equal beautiful among E&P companies? Can they load the entire portfolio of operations onto one management (bolstered by a few key retained staff from the shed management)? Or is it something more positive than cutting a few costs? |
Yes.
Relative price action since the potential deal was announced.. |
Pretty disappointing, so far. |
Yes maybe someone else may come in with a higher bid |
Looking at the price action it's not looking that good so far |
If this deal delivers real acretive value, which we should have a better handle on that next week. I hope 1.30 will seem even more undervalued than I think it is, without any deal. |
Now that it's in the public domain it serves no one for terms to be debated at length. I'd sense a logic in getting out some basic deal terms ASAP. Suspect advisors etc will be having a very busy weekend and quite peed off with the leak. |
Probably the deal is done and tomorrow we will know the info.
My bet is Mayfair mafia already knew the deal data, so the stock price reaction was what it was. |
Thanks. Some still seem to think that EV is the right metric to measure a companies value, however as you point out, actual value should be minus debt. |
 waterloo - going back to Enterprise Value (as just catching up with the thread)
I had a discussion on a board previously
If you have a business that makes a return it worth what someone will pay for it...
Maybe its £1k profit and valued at 10x so £10k
If you own 100% and have no debt its worth £10k for you to sell it.
But if its got debt of £5k then if you sell it the business is still worth the same amount to the buyer, but because they take over the debt liability they will pay you only £5k and perhaps pay back the £5k debt.
I had a discussion with someone that actually thought that adding debt added EV !
To be clear it does not.
Its like a set of scales . The EV is the EV - on one side of the equation and the other is (simplified) share capital + debt
EV = SC + D
So if you increase the debt , you reduce the value of share capital - and vice versa.
Which also ties into say not doing buybacks but paying down debt can double up on share price accretion
1- the EV can increase - less debt interest = more profit
2- less debt = more weighting towards share capital / increase share price.
To sum up the Enterprise Value is the value of say future cash flows or multiples of profits etc. The value of that is expressed as debt and share capital...
Hope that helps... |
Even if the market knew what the deal was (assuming it's even been agreed) the change in share prices of the two is more a reflection of the impact of gearing on the EVs of the businesses concerned. |
Yas, stop misleading people!
Both of those unique very carefully selected trades were logged after the close and one was a UT!! Typically for the vast majority of the 272 trades throughout the day the spread was considerably less than 4pc!
Anyway the significant factor was ENQ +14% SQZ +8% post RNS yesterday which suggests that the deal favours ENQ currently. That's common sense in the absence of any other relevant news for either yesterday. |
Anyway, none of that matters since immediate market reaction without the terms of the deal is just short term noise. |
Bounty,
Nonsense.
The last few trades had the bid/spread at 12.04-12.5 - check the data. That is a 4pc spread.
Moreover, prior to the news in the morning the firstctwo trades in ENQ were executed at 11.26p- that is the baseline from which you jusge the bid related effect.
SQZ was trading at 119 just prior to the announcement and went as high as 134/5 thereafter.
I contend the difference between the two was not particularly significant, as supported by the evidence. |
Some good discussion here. Let's wait to see the terms and then re-analyse.
I'm quite comfortable holding both as it stands. |
12:44/12:50 spread for ENQ towards the close yesterday, that was only a 0.48% spread a long way off your 4pc figure. 130.2/131.0 for SQZ is a 0.6% spread so actually there was no significant difference in the spreads between the two.
The market doesn't lie and there was a significant discrepancy between the rises of the two yesterday with the Enq rise being nearly twice that of the Sqz rise after the potential deal was rns'd, which does suggest a more favourable potential deal currently for Enquest shareholders, but that could change as discussions are ongoing, or Serica could walk away. |
I would not attach much importance to the percentage difference in gains yesterday - enq has a 4pc spread and generally stocks in single or low doublw digits tend to have the tendency to move more sharply.
In any event, until full details are provided it is impossible to say which party is getting the better outcome. |
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