It will be interesting to see how APA responds to this.Contrary...

It will be interesting to see how APA responds to this.

Contrary to Wall Street Jl and Reuters reports, the CKI bid of $1.32 for ENV is actually BELOW the APA offer using APA current ($6.84) and recent (average $6.70) share price.

As I explain on HC's ENV site, APA's offer works out to about $1.34 per ENV share. The .1919 share swap is $1.31 per ENV share on today's APA price ($6.84). But APA also gives ENV holders 3.45 cents per ENV share (18 cents per APA share) for the next distribution that goes ex-div in June.

In addition, CKI's offer triggers capital gains (tax time!) whereas APA's offer flows most cap gains through to APA shares.

But APA's offer has two shortfalls: (a) anyone who wants cash instead of APA shares gets only $1.17 per share and (b) if APA's sp drops below $6.70, CKI's offer squeaks ahead.

Regarding "(b)", APA's share price might stumble on this news (but who can say for certain?). Investors might shy away due to worry about APA paying too much for ENV. Also, many analysts didn't like the ENV acquisition, and APA's upward sp kicked in around mid-April when it was clearer that CKI would block the deal. (I have no opinion on this and APA execs like the acquisition).

Disclosure: I hold both APA and ENV shares in about 3:2 ratio, and have no other association with any of these companies.