A few facts on this Novus Energy sale to Yanchang:
1) Novus was my largest position by a considerable margin
2) My gain on my average cost base is 50%
3) Despite that gain I feel a little like I'm chewing on a lemon
I knew the sale price was considerably below market value for those assets. I had no idea why.
Then I read an article in the Calgary Herald that may shed some light on things. I've put together some thoughts here:
The article first explains that the sale is 35% below the average of the last 7 Viking transactions. Then it jumps to comments from the Novus CEO who is bragging about how the new company that he will be working for is going to become a "major player" making big time acquisitions.
So shareholders like me get to sell out at a discount price to the very large company that will now be employing the Novus CEO and Chairman. He gets to run a much bigger operation and get a fat pay cheque. The rest of us just get a disappointing price.
Maybe another bidder will step up and pay something close to a fair price.