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Gold/Mining/Energy : American International Petroleum Corp
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To: T-Lo Greens who wrote (5586)12/4/1997 11:38:00 AM
From: JT  Read Replies (4) of 11888
 
Nagging Question Regarding Buyout Possibilities

Someone help me out here, please. I've had this nagging question
about why would a major oil company (or multiple ones) pay up to
a billion dollars plus for 2-4 billion barrels of potential oil
reserves to a very small, company with little or no income at the
present time that has a market cap of about $250M on about 50M
shares? Why not offer to buy out the company for, say $300-$500M
and get the oil concession for half it's value? If the company
wouldn't agree, then why not attempt a hostile buyout? It just
seems that since AIPN is possibly extremely undervalued at the
present price of $5 a share (when a billion dollars or so of oil
reserves is worth about $20 a share when there are 50M shares
outstanding), it would be a helluva lot cheaper to TAKE rather
than purchase the concession.

Maybe I'm missing something about why Dr. Faris would not accept
such an offer or could somehow prevent a hostile bid. Maybe the
major oil companies don't like to "get involved" in such ugly
transactions, and would rather simply pay a fair market price
for the concession (or part of it).

Just pondering these questions while waiting for the "eye" to
pass ....

JT
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