I believe as part of the agreement to add two of Carl's people to the board, Icahn agreed not to purchase any additional stock. He's in the stock at about $12.50 per share if you look at the SEC filings.
One point of clarification that TLM's investor relations department has so far not confirmed despite my questions --- Is the $1.9 billion spend for the entire JV (i.e. TLM's share is only 51% of the $1.9 billion) or is TLM's share $1.9 billion? It wasn't very clear. I hope it is only 51% x $1.9 billion = $969M. If so, still a big commitment of cash to a very poorly operated part of TLM's business.
I believe TLM already hedged a big part of their natural gas output in 2014 / 2015 before the recent big run up so it won't get as much of the benefit as you think.
I don't disagree with your comments regarding Manny. Manny is one of the reasons Bebe has been struggling, especially over the last 5 years. This is why I was excited to see Steve take over. Manny is not involved and stepped aside to let Steve run the show and make changes. It is still early and it will take time to see improvements. There is a lot to fix. I attended the investor day in New York in Fall 2013 and was impressed with the new management team. This company will see sequential improvement over time, but it won't happen right away.
We are in the very early stages of a restructuring. The last time Bebe was able to show results from improving operations over several quarters, the stock increased to $9+ per share in early 2012. The same thing can happen again. This is why I find the timing of this news report very strange. Why now?? There is no pressure to sell. Bebe has $165M of cash on the balance sheet with no debt.
My hunch is somebody has approached Bebe with an offer, but before responding Bebe is gauging interest from other interested 3rd parties. What would be very surprising to see -- Manny doing a Michael Dell with Bebe. I wouldn't rule anything out at this point.
Where the stock price is right now, I think there is a better opportunity for Bebe to improve operations, which will drive the stock price higher than what it can get by selling itself right now. This assumes a buyer can even be found.
Just my thoughts.....
Reuters article posted late Friday indicates Bebe is exploring sale of company. I'm very surprised that it has decided to explore this option now in the midst of the new management team in the early stages of repositioning the company. Very curious timing. Why now?? This would help explain the recent SEC filing amending the senior officer employment agreements regarding change of control.
I read the article to mean GDF made an offer of $17 per share for the whole company, but when that was rebuffed by TLM, then offered to buy certain assets. Interesting that this is leaked out now. I wonder if this was done to get TLM back to the table to negotiate. Too bad Icahn has a standstill agreement with TLM right now.
I'll gladly sell my sharess at $17. It is either this or wait several years for the operations to improve. I don't think investors will be happy to hear TLM passed up this deal. There aren't too many buyers for oil & gas companies. This turn up the heat on TLM management. Do you suppose Icahn got wind of this, which prompted him to buy shares? It will be interesting to see how this plays out.
Your analyses of the events during the TLB sale debacle were very interesting to read.
What's your take regarding ARO shopping itself around, which was widely reported by Bloomberg. Seems like the company is already nervous if those rumors are true. No pop in the stock on this news, which I thought was very interesting. No real pop with other PE firms recently announcing big stakes. The stock continues to slide. Do you really think it is being held down because of the options expiration?
This holiday season was a disaster for ARO and it will report very heavy losses. I've been watching this situation since last Fall, but still have not pulled the trigger. It is burning cash, which has always caused me to take a pause while the stock continues to slide down.
See my other message with Icahn's basis estimate. On the MSN money website for TLM in the ownership summary, there is a listing for Franklin Templeton (10.84%) as a new position of 112,247,586 shares at $1,399,260,447 ($12.47/share). This position is also listed on Morningstar. However, there is no SEC filing for this. Maybe FT bought TLM stock on the Canadian exchange, which is why there is no SEC filing.
SEC fillings -
13D dated 10/7/13
Reports beneficial ownership stake of 61,554,602 shares through call options costing $277,000,000.
Partial list of call options at prices ranging from $3.22 to $4.64 for 10,167,082 shares with $8 strike price
Assuming all 61,554,602 shares have a $8 strike price, then (61,554,602 shares x $8.00 + $277,000,000) / 61,554,602 shares = $12.50 per share
13D/A dated 10/28/13
Reports converting all call options noted in 10/7/13 SEC filing into stock
Lists additional call options at price of $4.84 for 10,200,000 shares with $8 strike price ($128,928,000 / 10,200,000) = $12.64/share
13D/A dated 12/2/13
Reports acquisition of 4,305,476 shares for $52,045,696 = $12.09/share
Total consideration = $769,436,816 + $128,928,000 + $52,045,696 = $950,410,912
Basis = $950,410,912 / 76,060,078 shares = $12.50 / share
No one is very excited about energy, which I think is a signal to buy. I think prices of NG with continue to firm up especially with the cold weather. NG is storage is running below the 5 year average. Plus most E&P companies are cutting back capex to match cash flows, which result in lower production. Ichan bought 76M shares at about $900M or just under $12 per share. Franklin Resources also recently increased its stake.