Q: In one of your answers yesterday, you intimated that the sale of Enerplus might not be a done deal. "Devon is a much larger company than CHRD and if it wants ERF it likely could top this bid. .... This one may not be over." The press release announced that both boards unanimously approved the deal. Are you aware of the size of the breakup fee ? Do you know who the largest shareholders of ERF are ? As an ERF shareholder, I agree with your assessment that this is not a great deal.
5i Research Answer:
We need to see the circular when released to get some more info. Royal Bank (via funds) owns 4.7% of ERF. Wellington owns 4.2%. Kimmerridge Energy owns 3.8%. Vanguard owns 3.8%. Insiders own about 2%. Control is certainly in the market. We think CHRD should have offered more cash here. The deal becomes less attractive to ERF as its stock declines.