If DYN steps away and ENE files BK, there are other creditors with claims on the pipline that DYN was supposed to get whether or not the deal went thru, so they don't just walk away with it for for the 1.5 to 1.85$B [w/penalty]cost. If they walk, they not only risk significant net loss on the 1.85$b exposure, but also compete for assets in bankruptcy sale or face a rejuvenated competitor, sans debt. By the latter, I mean that while BK kills equity holders and hurts bond holders, it often leaves the restructured operating company lean, mean, tannned, rested and ready to compete in the marketplace. If the problem is excess debt, and the operating entity is sound, the equity holders are wiped and the debt holders become the equity holders of an entity with low enough debt levels to survive and thrive. Does DYN want to compete with a rejuvinated ENE...methinks not...so they do the deal, but probably at adjusted price My current probabilities are: Full deal 25%; adjusted deal @.2, 50%, & No deal .25%. based on this the current quote could rise 70+% to hit expected value of 6.61.
This is obviously little more than informed guess work. |
