Quite bounty - you should continue to post as you please. |
More nonsense from yas, I'll post what I like, it's your problem if you don't like looking at a simple comparison chart! It makes a lot more sense than your biased intuition! |
Get a grip Bounty - there is nothing significant arising from the price reaction of the two outfits.
Sqz has risen by just under 10pc, Enq by around 13pc as of the close of play friday based on prices just before the announcement was made (not your fictitious oie in the sky figures).
Sqz has a larger m/c and Co’s with a smaller m/c have a tendency to move more sharply, due to various issues such as liquidity, traded volunes etc.
There is no marked difference in price movement here, at least nothing sufficient to suggest terms have leaked and are more favourable to ENQ.
My intuitive feeling is sqz will get the better deal, not least because as a standalone it is the stronger of the two. |
An interesting point, he certainly has an M&A track record.. |
Whilst we ponder the outcome (if any) of this merger, it's useful to remember that in his previous employment, Martin Copeland advised Tailwind on their sale to Serica. Before that he led the team which advised PMO on their takeover by Chrysaor and the Ithaca/Delek acquisition. |
The dividends are what made it a great investment at the price I paid and I would be delighted if I could just keep the shares as they are whild the dividends drop into my account. |
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.At this stage there is no formal offer.
At sone point, information will trickle and the market might get a sense 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. |
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