When ANG went to shareholders for a vote a year or so ago to allow capital raisings (plural) a block of about 21 million votes were cast against the move. No doubt this was the BKN block. Why did they vote against? Obviously so their share would not be diluted and because they did not want ANG growing too fast so that they would become too expensive to buy out.
Now once ANG received the conditional buy-out approach recently from BKN, they activated the capital raising. This is as much a DEFENSIVE move as it is a move to finance the South American growth plan. Note that no mention was made of the need to raise capital to buy Servigut when the deal was announced some time ago. It is a good defensive move, and should force a higher bid from BKN in due course.
When would such a higher bid be optimal for ANG? Not until their South American growth plan begins to flourish. BKN needs to get in there and buy them out BEFORE the growth plan starts to flourish otherwise they will miss the upside and have to pay a lot more. That upside may be 12 to 18 months away. Hold on until then. There is no rush to do a deal with BKN from the ANG standpoint.
ANG Price at posting:
$3.55 Sentiment: ST Buy Disclosure: Held
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