VLO reported great earnings recently so they are a known quantity in that respect. The market is waiting for WNR's earnings, so in the current climate of market fear, money may be moving towards VLO because it seems like more of a 'sure thing'.. I would expect if WNR's earnings are okay that we'd start bouncing back up..
BTW, I never got a reply back from investor relations (surprise, surprise) to my question about $26.06 being a firm minimum price, or whether it could be lower than that based on 'pro-rating'. Given that we're now well below $26.06, I'm thinking my take on the press release, that it most likely could be lowered below that price by the pro-rating is perhaps correct, though as I and helpme_hanna pointed out, the press release is fuzzy in it's language and open to interpretation.
As for you chessen29, given the silence from investor relations on clarifying things, and the fuzzy, vague original press release, the rest of us are simply trying to make sense of the terms of the deal to decide what to do regarding the situation.
YOUR worthless comment, which does nothing but slam other posters for no reason, is the real DRIVEL post on the topic. You probably know even less than we do, so maybe you should try following your own advice and 'remain silent' yourself !
Sorry, rookie question - isn't TNH benefiting from the lower price of natural gas these days? I believe these fertilizer company's use Nat gas in the production process don't they? If so, I would think that the drop in energy prices would be a plus, though I don't know how much of their cost of production is based on the price of Nat gas. Anyone know? Thanks...
Yep, Zacks had a strong buy on NTI, and several favorable press releases on it. If I were one of the many law firms 'investigating' this lousy deal, I'd certainly be trying to find out if the 'independent' board members did or didn't have a personal financial incentive to so quickly accept this questionable deal..
aka_stockracker, my concern is that maybe WNR offered the top brass at NTI jobs in the merged organization with enough salary, stock options, etc., so that it was personally to their benefit to accept a somewhat low-ball offer from WNR, and to not bother to shop for a better offer either.
Those insiders hold shares in NTI, so that low-ball offer hurt them in that respect, however, if they happen to be getting a nice raise, stock options, etc., in the new organization, they may have been in a position to personally benefit from accepting the meager WNR offer despite the low-ball offer.
I know that supposedly the conflicts committee was 'independent', but the fact is, the deal should have been at $30 - $35 to be 'fair' IMO, so somehow it doesn't smell quite right to me about the deal.
It's subjective of course, but I'm not feeling that NTI management or the committee fought very hard for the best possible price for unit-holders. Why not seek out a better offer? Why so quickly was a price arrived at with WNR?
In the conference call announcing the deal, when asked if a better offer was sought out from another buyer, the CEO said "I don't know". Seriously, "I don't know"??? Isn't that something that the CEO should have had a strong level of interest in??
I notice there are half a dozen law firm 'investigating' the situation, I hope that they will try to learn what insiders at NTI are going to be offered in terms of salary/perks/benefits in the merged organization, to see if there was a conflict of interest there that may have caused them to go along with the low-ball offer.
There have been several comments so far on the message board indicating we'll get $26 as a minimum, but I'm not sure that that's true, due to the notice about how the $26.06 is subject to being "pro-rated'.
The whole deal seems fuzzy to me in a couple of regards, for one my reading of the statement on how the $26.06 will be pro-rated leads me to believe that if the $15 plus a partial share of WNR is lower than $26.06 , that unit-holders will receive less than $26.06.
Second, I believe using today's share price of WNR, that the deal is worth less than $26.06, not the $28 price that is talked about, using a 20 day moving average of WNR's price in October, in order to claim that a premium is being paid by WNR for the NTI units.
I'm not sure how relevant the 20 day moving average of WNR's price from October is, since I'm assuming that unitholders would simply receive the alloted partial share of WNR at the time the deal closes, which as far as I can see has nothing to do with it's price in October. Or am I wrong on that?
Again, I'm not clear on the whole deal, for the two reasons listed above, but based on the 'Pro-rating' feature I'm personally reading that the $26.06 is NOT a guaranteed minimum price, and also, that depending on what happens to WNR's price in the future, the deal of $15 plus a partial WNR share may be less than or greater than $26.06, and the discussion of it's moving average price as of October appears to me as potentially just a way to "spin" that this deal offers a premium to current NTI unit holders, which may or may not materialize in reality.
Overall, my impression, correctly or incorrectly is that instead of 'sweetening' the deal, the NTI management has actually gone for a worse offer than the original one!
They allowed the WNR offer to go down instead of up, is how I'm reading this deal, but again, the terms are fuzzy enough in my mind so that I'm not completely sure, but that's my impression...
What are you thoughts?
"They are probably getting all of their ducks in a row to move fast on closing the deal after the conflicts committee reports its findings to avert a competitive offer coming in"
So you believe that the NTI management may be collusion with WNR to keep the buyout price from going higher? Why wouldn't they want "competitive offers" that might move up the buyout price?
If that in fact was the case, perhaps there should be a class action suit, as certainly management has a fiduciary duty to get as much value to unit-holders as possible in any buy-out deal..
The WNR offer has been on the table for a while now, and investor relations is completely silent. There are a number of open questions that the average investor has no idea how to answer regarding that offer. I'm not sure why that IR department is getting paid a salary since they consistently leave us in the dark to wonder and guess (as they did with the shutdown earlier this year), instead of putting out some guidance.
In particular, we really should be told -
1. When is the company going to make a statement regarding the conflicts committee response to the offer, and whether they are urging acceptance or denial, and what if any steps are being taken to ensure that unit holders get a fair price.
2. What is the timeline and methodology for investors being allowed to vote on the issue?
3. Hobby farmer has found some text which tends to imply that the WNR's 38% stake might not be allowed to vote, which I would think would be a plus, since this deal IMO at this point is a boat anchor thanks to the abysmal performance of WNR recently, and since I'm gathering many unitholders were perhaps not that keen on the deal even before WNR's stock price started tanking.
Personally, I'd be much happier with a pure cash deal, so that the buyout price isn't tied to some other stock price. Or if the deal just went away, since I think NTI stands just fine on it's own, and the WNR offer is not a plus to NTI unitholders, at least IMO.
In any event, it's long past due for investor relations to give some guidance on the whole subject of the WNR offer, one way or the other.
It seems to me that NTI is a 'screaming buy' at this price level ($24 to $24.50), and here are the reasons I see for saying that. I'm interested in comments as to why I'm right or wrong, and if I've missed other positive or negative considerations: 1. The buyout offer from WNR has a current value over $26, so just for arbitrage there's a couple dollars upside there, plus the value of dividends which will be paid before the deal closes. 2. Even if the WNR buyout doesn't occur, this puppy is worth more than the current price range, just for the growth and the excellent dividend - in fact many investors would prefer that they buyout did fall thru, because they see this one as a great cash-cow, long term hold type of stock.. 3. Zacks has a 'strong buy' rating on it, and has put out a number of articles praising NTI and it's metrics. 4. It almost seems as if the refiners are tanking in the last week as the price of oil has gone down. But as I understand it, the profit margin is based on the crack spread between the price of oil and gasoline, so I'm not sure that it's logical that NTI or other refiners should tank as if it's profitability was based on the price of oil! It's not like they are an oil producer or explorer whose profitability is based directly on the cost of oil. Do these arguments make sense? And again, am I missing any important considerations?