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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Harold S. who wrote (51397)9/19/1999 1:05:00 PM
From: upanddown  Read Replies (1) of 95453
 
I really don't understand why anyone would be buying FGI here instead of HLX since HLX is still trading at a 7-8% discount to parity. I assume it is because they think HLX shareholders will reject the deal. FGI approval, of course, is not in question since JL has voting control. Anyone who expects the merger to fail might want to examine another recent merger, the DVN takeover of PZE.
If ever a merger was destined to fail, it was this one. Pate, COB of PZE, had a reputation as the biggest idiot in the oil bidness. He had turned down a $84 all-cash bid from UPR in 1997 only to turn around and sell PZE to DVN for well under 50% of the UPR deal. His self dealing was so blatant and obvious since part of the deal was that he got the COB job at DVN. The institutional holders (including heavy hitters like Price and Gabelli) was supposed to be furious. The online hatred of Pate bordered on postal. The president of PZE voted AGAINST the merger. DVN never sweetened the deal. PZE insiders only controlled 2%. We know what happened....the deal sailed right thru.
The situation with FGI/HLX is totally different. I think the deal will go thru at the current ratio and HLX is the obvious choice under that scenario. I think there is some slim possibility of further sweetening but that would only benefit HLX holders to the detriment of FGI holders. JMO.

John
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