Downside Protection

[Optionray]

Since the bid is not tied to the price of XOM, do you think we have some downside protection should energy stocks slide?  Unlike as it was worth oil search.

[AU74]

And if so, is there a safe options play to profit off of this fact?

[katytrader]

And if so, is there a safe options play to profit off of this fact?

"safe options play to profit" is somewhat oxymoronic, moreso during a takeover situation.

[cybersssss]

OptionRay- I have thought about this too and agree that it does offer us downside protection as the deal will be done using the 10 days average price of XOM.

[Putncalls]

I would be concerned that the cash offer limits the oil recovery upside. Both OSH and XOM shares should go higher.

[AU74]

And if so, is there a safe options play to profit off of this fact?

"safe options play to profit" is somewhat oxymoronic, moreso during a takeover situation.

LOL, I'm nothing if not oxymoronic!

[Kaliboo]

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.

[katytrader]

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.

  Note also that XOM has been pushing up to its multi-year high, causing some pundits to call its current price "over-valued"  I suspect this is a reason for not offering an all-share deal with a ratio as OSH did, anticipating a possible drop before deal is done.   More shares would not at all be bad if one likes dividends.

[Thylacine-2]

I would be concerned that the cash offer limits the oil recovery upside. Both OSH and XOM shares should go higher.

  Right, Puts.  Xom would not have framed the offer that way unless they expected their share price to go up.