Wednesday, December 17, 2014

The Talisman mercy killing:

A clip from BNN - The TSX ended more than 1 percent higher on Tuesday boosted by a 46 percent surge in Talisman Energy shares after Repsol said it would pay $13 billion for the producer; and - according to the business media the CEO of long-struggling Talisman Energy Inc. (TSX:TLM) says a multibillion-dollar takeover by Spanish energy giant Repsol is the best possible outcome for shareholders and he expects the deal will receive federal approval. To recap - Talisman Energy Inc. (TLM) closed Dec 16 at $ 8.84 up 2.87 for a one day gain of 48.07%.

That reminds me of a business headline in the Calgary Herald – September 21, 2012 (I kept the paper) “Nexen CEO excited by deal,” referring to the July takeover offer by the Chinese CNOOC - the stock popped about 50 percent on the news. Those lucky shareholders! The reality is that long term investors actually lost money on both deals. In the case of Nexen the post deal close of about $17 was actually lower than he mid 2006 prices. In fact the only winners were the Nexen buyers of the lows of 2008 and 2011. In the case of Talisman the only shareholders who made money were the buyers during the recent eight week collapse beginning in October 2014. There could be more exciting times ahead for long term energy investors

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