Anybody notice that there is a big difference in the structure...

Anybody notice that there is a big difference in the structure of the two offers?

The CLA offer, although non-binding, was explicitly stated to be at a fixed price of 3c per share, to be made up of a cash component + SVM shares equivalent to the total value of the transaction.

The ORR offer is set at cash component + a static 0.0967 SVM share per ORR share.

The CLA offer actually becomes more attractive to a CLA holder as SVM's SP declines because then, SVM would have to issue more shares to pay for the transaction (assuming that their SP would then appreciate after the deal!). On the other hand, the ORR deal is directly proportional to the SVM SP. In fact, as of now, the deal only values ORR shares at 55c instead of the 60c that was in the announcement, because the SVM SP has been dropping heavily since then.

I also think that they may have had to change their acquisition strategy since they made the CLA offer because of the poor performance of their SP. Mid May when they made the CLA offer, they were priced at CAD4.78. Now they are only at CAD3.61, an almost 25% drop. That means that they would have to issue 25% more shares than they initially thought they were going to have to issue to acquire CLA at 3c a share. They probably looked at all this and said "we made a mistake with that offer", and are now pulling out of the CLA deal.

On a side note, I would be looking very nervously at the SVM SP if I were an ORR holder. If the down-trend continues, it could potentially make the offer price even lower than what ORR was trading at before the offer was announced, at around 45c. Even worse, it would seem like now that the offer has been made public, the fortunes of ORR would now be tied with the downward trending SVM SP. If SHs become too dissatisfied with their offer, it'll be the same shit-show as what's happened here. Binding agreement means nothing if SHs are going to vote it down. The best outcome for ORR I think is to get a counter-bid with a cleaner offer, one that is not so bound to the fortunes of the acquirer's SP.

I don't know, these guys seem to have the "reverse Midas" touch. Everything they touch seems to turn into you-know-what.