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Plains Exploration & Production Company Message Board

  • alaskan4evers alaskan4evers Dec 7, 2012 3:22 AM Flag

    Why are we not at $50?

    I must have missed something? If the bid for buy out is $50 why are we at $43 - can anyone explain it to me - TIA

    Sentiment: Hold

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    • There is a arbitrage risk spread in the stock now. The deal is for $50 pxp share. The closer we get to the deal closing the smaller the spread will be. Right now there is risk being valued into this deal at about 12.5%. This will continue to close the gap as the stock moves higher and closer to the deal closing. I am holding my PXP until it gets closer to $50, obviously.
      I would hold or buy the stock for the 12% gain.

      Sentiment: Hold

    • The offer is for $25 cash plus .6531 shares of FCX for every share of PXP. When they announced the offer, FCX was about 38.2, which would have valued each share of PXP at about $50. Since FCX stockholders have sold off their stock to 30.81 (as of now), that means each share of PXP is worth about 45.12 based on yesterday's closing prices. I'm not sure why we're at 43; maybe some investors think the deal might fall through.
      Personally, I'm holding out for a higher price for PXP. If the deal falls through, so be it.

 

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