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Strategies & Market Trends : 2003 Canadian Stock-Picking Challenge
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To: RonS who wrote (394)2/25/2003 6:51:29 PM
From: geoffb_si  Read Replies (2) of 790
 
Ron:

Not that Al needs defending, but I'll try:

In exchange for your 4640 BAY shares, you get 1784.54 PAA shares + 892.27 warrants.

Each warrant is exercisable into a PAA share after you pay the company $12 per warrant (within 5 years). Since the stock trades for $10.25/share, the warrants are out of the money.

Further, since you can't put any more money into the contest to exercise the warrants (EDIT: $10,707.24 to be exact) and get the PAA shares, and since you can't carry the cash + warrants in the contest, the value of those warrants at the time of the share exchange (today) is essentially zero.

Although the hope for BAY shareholders is that at some time in the future PAA shares sell for more than $12/share and those warrants are worth something, Al has no way to put a dollar value on those warrants at the present time.

Regards,
Geoff
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