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Whitecap Resources Inc. (WCP)
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Baytex Energy Corp. (BTE)
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Topicus.com Inc. (TOI)
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Lumine Group Inc. (LMN)
Do you still see both Topicus and Lumine Group as long term holds or should i just buy CSU and add more to my existing shares? If oil companies decide to privatize, how would the investor share price be reflected? Does the company buy out our portion of shares and at what price (current price of market).. Lastly, any comments on baytex would be appreciated. Thanks
We remain completely comfortable with CSU. LMN/TOI may offer good long term potential as they are much smaller. However CSU still owns a lot of each and will still benefit if they do well. LMN we quite like as a small cap for the long term. In any privatization, shareholders need to approve the takeover price. Typically a control premium needs to be 'enough' to convince shareholders to vote yes. But this premium can vary widely, and we have seen ranges from -10% to +200% on some deals in other sectors. In energy, an average premium might be 30%. BTE is very cheap and has started a dividend again after cancelling it for eight years. It's not our favourite, but has improved a lot over the past few years. Debt is still higher than most peer companies but is probably more manageable now as cash flow has improved remarkably with higher prices.