'Putncalls' pid='74261' datel Wrote:I would be concerned that the cash offer limits the oil recovery upside. Both OSH and XOM shares should go higher.
Based on what I read, crude spot prices are heading lower t hrough the fall. There's too much gasoline on the market, so refiners are reportedly more likely to reduce crude throughput. That means more crude will have no place to go. So some companies that closely correlate with oil prices are likely to go down in PPS. I sold my few shares of TOT today, and a small cap domestic oil company last week.
Today, XOM, TOT and IOC are all down slightly at close, not to mention a bunch of others, including XLE.
So this could actually be good since the fixed part of the sale is $45.00. By fall XOM shares could be a good bit lower, meaning we'll get a few more shares for our $45.00.
I presume OSH shares are up because their deal was beat by XOM. I imagine the PPS will go right back down if they make a superior counter offer. The first OSH offer has more potential for downside in their share price than upside IMHO.