by Travis Johnson, Stock Gumshoe | June 30, 2011 11:36 am
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Well, disappointing news for Reliable today — they’re agreeing to be acquired by Crescent Point, a large Canadian company focused on unconventional reservoirs in Western Canada and in the Bakken areas on the US side of the border. Not a big surprise, since Crescent Point is a partner of Reliable and already owned more than 10% of the company.
The disappointment is that I think Crescent is getting a bargain given the big land position and producing nature of Reliable, Crescent is effectively paying just $100 million, though it’s a share transaction so Reliable shareholders will get shares of Crescent Point in the exchange — ends up being a weak premium, in my mind, of about 20%. Which also means that I’ll end up slightly underwater on the deal, since Crescent Point is offering a little less than I paid for the shares less summer.
Dang. Wouldn’t expect a bidding war or anything, given Reliable’s tiny size and the good fit with Crescent Point in terms of areas of focus and their existing partnership, but I suppose I can hope a little bit. The info is on the Crescent Point website, where they also upgraded their forecasts a bit today here: http://www.crescentpointenergy.com/documents/news/CPG-2012-03-15-YErelease.pdf
RELZF is in your portfolio. Should it be Crescent now?
Yep, sorry.