If I understand the buyout/merger proposal correctly, each PSE shareholder will receive .2325 shares of PXD sometime in the 4th quarter. Currently PXD sells for 180.03 (today) versus 42.07 for PSE. If the transaction happened today, then .2325 shares of PXD would be worth $41.86. Why do you think that today's market value for PSE is higher than the proposed buyout value? Does selling now make any sense? Your opinion please.
There's not much difference, just a few cents. Some people may be anticipating the offer be raised but that's very unlikely - they already upped the initial offer and being in control already they don't have to bid against anyone else. Also there may be one distribution left in PSE (not sure) which may also factor into a slightly higher price than the equivalent PXD price)
Selling now is certainly reasonable. The price of PSE is now tied to the price of PXD and will only go up as PXD rises. If you want to hold PXD then don't sell. If you don't plan to keep PXD then might as well sell now as you won't get more money by holding longer, except the possibility of one more 52c distribution.
Liza, another reason to continue to hold PSE right now is to get to long term capital gain tax treatment. Which is my situation. Unfortunately, I don't know if I have enough time and my understanding from your previous post, at the time of the buyout, this needs to be treated as a sale and not an exchange. True?