Effective April 2, 2012 Pembina and Provident completed a court-approved statutory plan of arrangement (the “Arrangement”) pursuant to Section 193 of the Business Corporations Act (Alberta) whereby Provident shareholders received 0.425 of a common share of Pembina for each common share of Provident held. Upon effectiveness of the Arrangement, Provident became a wholly-owned subsidiary of Pembina upon Pembina’s acquisition of all of the issued and outstanding common shares of Provident.
Prior to the opening of trading on the New York Stock Exchange (“NYSE”) on April 2, 2012 the common shares of Provident were suspended from trading. The common shares of Pembina were listed and commenced trading on the NYSE under the ticker symbol “PBA” on the same day. The common shares of Pembina continue to trade on the Toronto Stock Exchange under the ticker symbol “PPL.”
Thanks true, for that info. I thought i read where they were going to reduce dividend ratio which i took for reducing pay out frequency. I don't have that many shares so reducing my shares in half is going to hurt but the 27% may help with the number of shares good luck to all.
a little info on Pembina..
Pembina's common shares are listed on the TSX under the symbol PPL. Our 5.75 percent convertible debentures, which mature on November 30, 2020, are listed under the symbol PPL.DB.C. (From 1997 to October 2010, our corporation was wholly-owned by Pembina Pipeline Income Fund. The income fund's trust units were traded on the TSX under the symbol PIF.UN and it's debentures were listed under the symbol PIF.DB.B).
Proposed Acquisition of Provident Energy Ltd.
Pembina announced on January 16, 2012 that it has entered into an agreement with Provident Energy Ltd. (TSX: PVE, PVE.DB.E, PVE.DB.F, NYSE: PVX) ("Provident") (the "Arrangement Agreement") for Pembina to acquire all of the issued and outstanding common shares of Provident by way of a plan of arrangement under the Business Corporations Act (Alberta) to create an integrated company that will be a leading player in the North American energy infrastructure sector.
while giving Provident shareholders a significant premium and a 27.5% increase in monthly cash dividends on a per share basis after taking into account the Provident Exchange Ratio (compared to the level of dividends currently received by Provident Shareholders).
Unless I'm reading this wrong, it appears that not only would the monthly dividends continue but would increase by 27.5%. Sounds good to me! Getting a nice 24% price increase has been very nice as well...
I guess we are taken over, I not sure what to make of it we are getting less than .50 share of the new companies share .42 for every pvx share, if i'm reading it right. That sucks if it true. It doesrepresent a 24% increase because they are selling of 29.00 PPS, but i think the monthly dividends are gone, again if i'm reading correctly. It's one of the reasons i bought this stock in the first place. Oh well, i'm not sure what i'm going to do. Any thoughts board?
Pembina Pipeline Corporation to Acquire Provident Energy Ltd., to Create Leading North American Energy Infrastructure Company
Date : 01/16/2012 @ 2:01AM
Source : PR Newswire
Stock : Provident Energy (PVX)
Quote : 11.27 -0.07 (-0.62%) @ 11:37AM
Pembina Pipeline Corporation to Acquire Provident Energy Ltd., to Create Leading North American Energy Infrastructure Company
Provident Energy (NYSE:PVX)
Historical Stock Chart
1 Month : December 2011 to January 2012
Pembina Pipeline Corporation (TSX: PPL, PPL.DB.C) ("Pembina") and Provident Energy Ltd. (TSX: PVE, PVE.DB.E, PVE.DB.F, NYSE: PVX) ("Provident") are pleased to announce they have entered into an agreement (the "Arrangement Agreement") for Pembina to acquire all of the issued and outstanding common shares of Provident (the "Provident Shares") by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement") to create an integrated company that will be a leading player in the North American energy infrastructure sector. Upon the successful completion of this transaction Pembina intends to increase its monthly dividend rate from $0.13 per share per month (or $1.56 annualized) to $0.135 per share per month (or $1.62 annualized) representing a 3.8% increase and reflecting management's confidence in the significant operational and financial strength of the combined entity going forward.
Under the terms of the Arrangement Agreement, Provident shareholders will receive 0.425 of a Pembina share for each Provident share held (the "Provident Exchange Ratio"). Based on the January 13, 2012 TSX closing share price of Pembina of $27.90, the Provident Exchange Ratio represents a premium of 24.7% to Provident's closing TSX share price on January 13, 2012 of $9.51. Based on the 20-day weighted average TSX share price of Pembina of $29.11, the Provident Exchange Ratio represents a premium of 26.2% to Provident's 20-day weighted average TSX share price of $9.80. The proposed transaction is expected to immediately increase Pembina's cash flow per share, increase its dividends per share and reduce its dividend payout ratio. After completion of the proposed transaction the combined assets and employees will operate under the Pembina name and will be led by a combination of Pembina's and Provident's executive team.
Under the Arrangement Agreement, Pembina will also assume all of the rights and obligations of Provident relating to: (i) the 5.75% convertible unsecured subordinated debentures of Provident maturing December 31, 2017, and (ii) the 5.75% convertible unsecured subordinated debentures of Provident maturing December 31, 2018 (collectively, the "Provident Debentures"). The conversion price of each class of Provident Debentures will be adjusted pursuant to the terms of the trust indenture governing the Provident Debentures based on the Provident Exchange Ratio. Following closing of the transaction, Pembina intends to make an offer for the Provident Debentures at 100 percent of their principal values plus accrued and unpaid interest. The repurchase offer will be made within 30 days of closing of the proposed transaction. Should a holder of the Provident Debentures elect not to accept the repurchase offer, the debentures will mature as originally set out in their respective indentures. Holders who convert their Provident Debentures following completion of the Arrangement will receive common shares of Pembina.
In addition, Provident will immediately suspend its premium dividend reinvestment plan and dividend reinvestment plan.
The Combined Entity
Based on the Provident Exchange Ratio and Pembina's share price quoted above, the combined company will have a market capitalization of $7.9 billion and total enterprise value of $10 billion, making it one of the largest publicly traded energy infrastructure companies in Canada.
"Provident's assets, employees, customers and growth projects are an outstanding fit for Pembina," said Bob Michaleski, President and Chief Executive Officer of Pembina. "The proposed transaction integrates our energy transportation and gas processing businesses with Provident's suite of services including natural gas liquids (NGL) extraction, fractionation, storage, transportation and logistics, and will significantly accelerate our growth capital plans for these business segments. Our expanded footprint will provide greater access to natural gas liquids markets across North America, and will allow us to offer customers a significantly expanded spectrum of energy services."
"This is a logical transaction that leverages off Provident's strong growth as a pure play midstream business," said Doug Haughey, President and Chief Executive Officer of Provident. "It generates substantial value for Provident shareholders and brings together two organizations with complementary strategies and assets. The result will be one of the strongest energy infrastructure players in Canada. Provident's shareholders will participate in a larger entity that has the capability to pursue larger and more complex growth projects, has exposure to more elements of the energy infrastructure value chain, and offers greater liquidity and presence in the capital markets. Based on Pembina's current dividend rate and the Provident Exchange Ratio, Provident's shareholders will receive an increase in dividends per share relative to Provident's current dividend."
Benefits of the Combination
The proposed transaction is expected to provide Pembina shareholders with an increase in cash flow per share, increased dividends per share and reduce Pembina's payout ratio, while giving Provident shareholders a significant premium and a 27.5% increase in monthly cash dividends on a per share basis after taking into account the Provident Exchange Ratio (compared to the level of dividends currently received by Provident Shareholders).
The combined entity will create one of the largest publicly traded energy infrastructure companies in Canada, offering the following benefits for shareholders of both Pembina and Provident:
Scale and Scope: A substantially larger, and more diversified portfolio of businesses across the energy infrastructure value chain;
Complete Value Chain: A highly integrated suite of services being offered to customers through the combination of Pembina's liquids transportation, gas services, and midstream and marketing segments and Provident's capabilities in NGL extraction, fractionation, storage, transportation and logistics permitting both a diversification of business and strengthening the value proposition for its shareholders and customers;
Key Growth Areas: Extensive energy infrastructure businesses located in key growth regions including: Montney, Duvernay, Alberta Deep Basin, Pelican Lake heavy oil, Athabasca oil sands, Cardium, Swan Hills, Bakken, Marcellus and Utica;
Expanded Footprint: Greater access to NGL barrels as well as increased capability to store, process and market barrels across key North America hubs including Edmonton, Sarnia and Mont Belvieu. The pro forma company will have operations in key market areas for NGL and crude oil in close proximity to pipelines, rail and truck facilities, storage, fractionation, petrochemical and refining customers;
Strong Leadership Team: An experienced management team with a strong focus on being a responsible, reliable operator and a trusted member of the community;
Substantial Growth Opportunities: A larger entity capable of pursuing more complex growth projects at an accelerated pace including an aggregate capital program of approximately $700 million of announced spending in 2012 (Pembina: $550 million, Provident: $150 million). Major near-term projects include:
Saturn and Resthaven liquids extraction facilities;
Peace NGL pipeline expansion;
Redwater liquids storage development;
Redwater fractionator capacity expansion;
Strong Synergies: The combined entities will generate substantial synergies:
The ability to leverage technical, commercial and operational skills from both Pembina and Provident over the combined asset base, achieving cost savings and operating efficiencies;
Synergies that will be realized by more fully connecting, integrating and utilizing the current and future asset bases of both companies;
Corporate cost synergies through the consolidation of head offices, the decrease of Provident debt service costs, and the elimination of costs associated with Provident's public company costs;
Capital efficiencies through the allocation of capital expenditures to the highest return projects.
Superior Financial Platform: The pro forma company will generate a diversified stable cash flow stream and enjoy a very strong balance sheet with pro forma 2011 senior debt to EBITDA of approximately 2.4x.
Due to the continued success of producers drilling for liquids rich natural gas and the increase in field liquids extraction, the amount of NGL being produced in the Western Canadian Sedimentary Basin has increased significantly. To meet the growing need of producers in the region, Pembina expects that on closing of the proposed transaction, it will begin development of a new 65,000 bpd fractionator at Provident's Redwater site, which is anticipated to be in-service by mid 2014 pending continued customer support and subject to required regulatory and environmental approvals.
Canadian and U.S. Tax Considerations for Provident Shareholders
The Arrangement Agreement has been structured to allow Provident shareholders to receive Pembina shares generally on a tax-deferred basis for Canadian income tax purposes. In addition, the Arrangement Agreement has been structured so that the Arrangement will qualify as a tax-free transaction for U.S. federal income tax purposes. If the Arrangement qualifies as a tax-free transaction, Provident shareholders who receive Pembina shares will not be required to recognize gain and will not be permitted to recognize loss. However, there can be no assurance that the U.S. Internal Revenue Service will not challenge the treatment of the Arrangement as a tax-free transaction.
About the Transaction
The Boards of Directors of Pembina and Provident have each unanimously (other than the directors who have recused themselves from the process of considering the proposed transaction) approved the Arrangement Agreement and have concluded that the proposed transaction is in the best interests of Pembina and Provident, respectively. The Boards of Directors of each Pembina and Provident are expected to provide written recommendations that their respective shareholders vote their shares in favor of the Arrangement (or, in the case of Pembina, the issuance of Pembina shares in connection with the Arrangement) in the joint information circular to be prepared and mailed by Pembina and Provident in connection with the proposed transaction. In addition, each of the Directors (other than those that have recused themselves from the process of considering the transaction) and Executive Officers of Pembina and Provident have agreed to vote their shares in favor of the proposed transaction.
The proposed transaction will be carried out by way of a court-approved plan of arrangement and will require the approval of at least 66 2/3% of holders of Provident Shares represented in person or by proxy at a special meeting of Provident shareholders (the "Provident Meeting") to be called to consider the Arrangement. It is expected that the proposed transaction will be exempt from the registration requirements of the U.S. Securities Act of 1933, as amended, pursuant to the court approval exemption afforded by section 3(a)(10) under that Act. The proposed transaction is also subject to obtaining the approval of a majority of the votes cast by the holders of Pembina Shares at a special meeting of Pembina shareholders (the "Pembina Meeting") to be called to consider the issuance of Pembina shares in connection with the proposed transaction. In addition to shareholder and court approvals, the proposed transaction is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature, including compliance with the Competition Act (Canada) and the acceptance of the Toronto Stock Exchange (the "TSX").
Further information regarding the proposed transaction will be contained in a joint information circular that Pembina and Provident will prepare, file and mail in due course to their respective shareholders in connection with the Pembina Meeting and Provident Meeting. It is expected that the Provident Meeting and the Pembina Meeting will take place in late March, 2012, with closing expected to occur as soon as possible thereafter subject to regulatory approval. All shareholders are urged to read the information circular once it becomes available as it will contain additional important information concerning the proposed transaction and the Arrangement.
A copy of the Arrangement Agreement will be filed on Pembina and Provident's SEDAR profile and will be available for viewing at www.sedar.com.
Pembina expects to apply to list Pembina shares issuable under the proposed transaction on the Toronto Stock Exchange ("TSX") on closing and Pembina will apply to list its shares on the New York Stock Exchange ("NYSE"). It is anticipated that the Provident Shares will be delisted from the TSX and the NYSE following completion of the Arrangement.
Management and Staff
The combined entity will be led by Bob Michaleski, President and Chief Executive Officer of Pembina, and a combination of Pembina's and Provident's executive teams. Due to the complementary nature of the businesses, Pembina plans to make employment offers to substantially all of Provident's employees.
Board of Directors
Subject to a successful completion of the proposed transaction, each of Mr. Grant D. Billing and Mr. Jeffrey T. Smith, current members of the Provident Board of Directors, have advised that they will accept positions on the Pembina Board. Mr. Billing is currently Chairman and formerly CEO of Superior Plus Corp. Mr. Smith is an independent businessman and is currently a director of Pace Oil & Gas Ltd. Mr. Billing and Mr. Smith have extensive experience in operations, finance, mergers and acquisitions, governance, human resources and compensation, and environment, health and safety. Mr. Randy Findlay, currently a director of both Pembina and Provident, will continue as a director of Pembina.
just go to a traders board or another board and you can post all you want... even use my freebie board..
Solid yield here.
I will send you the information Money.
steve, ok im new to ihub and don't have a full membership yet so you can send me an email to firstname.lastname@example.org and ill chat with on the yahoo page. i didn't realize and have not read the rules, i guess my other post were not in line with the ihub policies can you be banded permanently from ihub for that or is just a suspension. I'll be looking for your email. thanks money
steve, thanks again for the info, I greatly appreciate the cautionary points about the markets and pimco. I have not had a chance to check some of the pimco funds I was interested in I chose pvx solely on its monthly divid and oil trust. The one pimco i own is pcm and best i can tell is fund that invest in commerical mortgaged back securities. I'm looking at investment ranges between $1-20 as a stock price. I don't have alot of investment capital at the moment. However my investment goals are the have majority of my porfolio in high divid stocks that pay monthly and that why I'm looking at stocks like pimco they have a number of stocks that operate has mutual funds with flexiblity and trading as stock. I agree the market is due for a corrections but historically these have done well through those times. I started a little late in life a this investing and I'm greater risk than I should staying this market. I'm on this board so that tell you something about my investment stratgey, (pennyland) however, I really do hope to turn some or most of the gain in those stock into divid barring stocks like pvx and pcm and any others like them. I know this is little long wind for a post so cut it short here ha ha ha.
I almost forgot...be wary of PIMCO funds unless you are well versed in bonds. If you are looking to buy one of their funds, make sure that you check to see what the fund itself invests in. You do not want to get caught with a fund that is heavily invested in the PIIGS for example. (Portugal, Ireland, Italy, Greece, Spain). Greece was recently downgraded to junk bonds!
I like your way of thinking "Money"! My outlook on this market is not very optimistic. Almost the same way that I felt just before the crap hit the fan a couple of years ago. I do not see how this market can just keep going up with no real fundamentals to support it (fudged government numbers to keep wall street happy). I see a major downturn happening with inflation already seeded and growing, although you will not hear that in the MSM. The true numbers are skewed as to not show reality. Example: Higher food and gas prices are not factored into the Gov't inflation numbers which gives a false number to the public. I call it "shadowy accounting practices". So, hedging your possible losses with dividend paying stocks, like PVX, are a great way to protect your bottom line. You should always keep some extra cash on hand just in case there is a major downturn so you can dollar cost average your position(s). I have a few very sweet dividend payers that are diverse among different sectors, but I need to know what your willing to pay for the individual stock. Example: $1-$5/ share, $5-$10/ share etc. Let me know and I will give you some of my picks so you can do your due diligence on them. Also, dividend payers are for longer term holdings. That way you get both the dividends and the capital appreciation. Ignore the short term swings.
steve, thanks for the info i started investing in this stock for the monthly dividend so i guess i will stick with it for a while longer. I have found an American company that has monthly dividends as well so i might consider PIMCO (it is family of funds) for my future investments, i'll save on foreign taxes as well. Are you aware of any other stocks that pay a monthly any recommendations would be appreciated. thanks money8547
I believe that they will be taxed higher and therefore dividend cuts will be soon to follow. But, as I stated before,PVX has a tax loss pool that could allow them to continue a high dividend rate for a few more years. It would be a matter of personal opinion as to whether you should sell or not. You need to weigh out whether you believe commodities will continue to rise, what your objective is with your investment timeline, will they be bought out etc. Hope this helped.
steve, what about this trust converting into a corp structure, is that good for U.S. invest or not and does anybody know about this
news the other day about 6.5% convertible debentures. What does this mean to us should we hold the stock or sell. I have a 160 shares not a great deal of share but for me it represent a good chunk of my holdings. I just dont know what the best action for this stock. again thanks in advance for any input, it appears it just you and i who are following this board steve good luck money8547
First off, I am not a CPA, so you may want to consult someone with more extensive knowledge in this area. But, as far as I know, I believe that if you sold the spinoff for a loss, then you can claim that as a write off on your taxes. Example: You received a spinoff (100 shares @ $10/share). The value is $1000. You then sold it for $5/share. You can take the loss of $500. Just like any other stock you sell at a loss. Remember that there is a cap per year on losses, but you can carryover losses to the next year. I got out of PVX because of this spinoff thing but it seems that they are doing fine pps>$8. the only thing I see as a difference is the dividend seems to be a tad lower than when I owned shares. It still pays approx 7% so it really is not a bad dividend machine! And you know that oil will keep going up. I hope that I helped you with your question.
steve i have received one of these spin-offs and was unaware of where it came from. when i got it on my td acct it appeared as share that had a built in loss was that the tax issue for the company. i sold the shares i had to do my taxes so i not sure if i realize a 1000 dollar loss of not. it said i bought the share for $60 and sold the 18 share for $7. should i have kept the shares do you think they would ever get back to $60 a share i have never dealt with this before and dont understand spin-offs very well any info you can share would greatly appreciated thanks money8547
CALGARY, ALBERTA--(Marketwire - 12/01/10) - All values are in Canadian dollars unless otherwise indicated.
Provident Energy Trust (Provident) (TSX:PVE.UN - News) (NYSE:PVX - News) held its special meeting of unitholders in Calgary today at which unitholders voted in favour of a resolution recommended by the Board of Directors to reorganize Provident into a dividend-paying corporation to be known as "Provident Energy Ltd." (Provident Energy).
Provident's unitholders voted over 97 percent in favour of the conversion, which is expected to become effective on January 1, 2011, subject to final approval by the Court of Queen's Bench of Alberta and receipt of all necessary regulatory approvals. Under the conversion, each Provident trust unit will be exchanged for one common share of Provident Energy. As previously announced, the anticipated dividend for Provident Energy following completion of the conversion is initially expected to be set at $0.045 per share monthly or $0.54 per share annually.
Shareholder Rights Plan
At the Special Meeting, Provident unitholders also approved the adoption of a Shareholder Rights Plan (the Rights Plan) for Provident Energy. The Rights Plan helps ensure the fair treatment of Provident Energy's shareholders in the event of any takeover bid for the corporation. It provides Provident Energy's board and shareholders with additional time to evaluate any unsolicited takeover bids and provides the board with adequate time, where appropriate, to seek out alternatives to maximize shareholder value. The Rights Plan is substantially similar to Provident's current unitholder rights plan and is consistent with current institutional investor guidelines. Upon completion of the conversion, a copy of the Rights Plan will be available on Provident Energy's website at www.providentenergy.com and on SEDAR at www.sedar.com.
Provident Energy Trust is a Calgary-based, open-ended energy income trust that owns and manages a natural gas liquids (NGL) midstream business. Provident's Midstream facilities are strategically located in Western Canada and in the premium NGL markets in Eastern Canada and the U.S. Provident provides monthly cash distributions to its unitholders and trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbols PVE.UN and PVX, respectively.
I'm not sure if they even put a PR, but the record date was July 9, 2010. The ex-distribution date was on Wednesday, July 14, 2010.
http://www.cboe.com/publish/TTStockSM/10-391.pdf for a little more info.
I own 500 shares of PVX and I received 61 shares of MDOEF which closed at $8.387 today. (this is in my Fidelity account)
I'm not sure what that 36 price is. TDA is always screwed up, I have them too.
Yeah that makes sense.
MDOEF, I think that right. Anyway its in my TDA account, but shows a purchase price of 36ish? Is that a glitch within TDA or is that what PVX essentially paid.
I took a look at the numbers and here's what I came up with.
For every share of PVX you own, you will receive .1225 shares of PCE.TO (or an equivalent amount of MDOEF.PK if you are in the US).
Yesterday' close for PCE.TO was $8.88, so .1225 of each share is $1.09.
With PVX closing at $7.56, a price of $6.47 is about equal with the dividend.
Hope this helps.
I think $6.50 is the break-even with the stock dividend. I haven't had the time to verify this, but will take a better look at it now. It's one of my IRA stocks so I don't watch it much.
The shares of PACE are listed as MDOEF in the US and should be in your account by 7/19 if they are not there already.
Nice run up to $7.00 this morning.
Sorry I am a little late in the conversation. PVX is tanking pre-mkt today -.92 currently.
When are new shares going to be issued. Why PVX PPS dropping greater than 10%?
i dont know exactly. I would imagine the company will release that later within a week or 2. They seemed like it was going to happen sometime before the end of June.
When will U have to own PVX in order to get the other company shares.
oh, and it is called Pace Energy by the was PCE will be the ticker.
Under the terms of the Arrangement, each Provident unitholder will directly receive 0.12225 shares of NewCo for every unit of Provident held and each Midnight shareholder will receive 0.1 shares of NewCo for every share of Midnight held. The exchange ratio incorporates a planned one for ten consolidation of Midnight shares pursuant to the terms of the Arrangement and immediately prior to the issuance of NewCo shares. Provident unitholders will own 81 percent of NewCo and Midnight shareholders will own 19 percent of NewCo, upon completion of the Arrangement.
so if you own 1000 shares of PVX, you will get 122 shares of the New Company.
when I talked to the company, they said we would be issued all new shares in the new company, effecting nothing else. We will just be getting free shares. That is why I cant understand why the share price isnt steadily uptrending into this transaction. You would think with free "spinoff" shares, folks would be jumping on this one.
Will the share price of PVX drop when they issue the new shares in the other company. Lets say PVX is 6.50 a share and with the new company will they divide the share price between the 2 companys. Or will our price stay the same for PVX. Also how much is taken out for candian tax out of 1 share paying .06 cents right now how much are we loseing.
email i recieved from provident..
Good morning Michael,
1) The new combined entity will be a standalone corporation with Provident’s Upstream, oil and natural gas, business combined with Midnight oil to form a new company. Provident will continue as a pure-play midstream company so in effect you will have shares in two indecent operations.
2) Provident Midstream will keep its current share structure and not do a consolidation.
3) Provident midstream will continue paying a distribution where as the upstream company will be growth oriented and not pay an initial distribution.
from what I understand and correct me if I am wrong. It looks like provident pays out solely from its midstream biz and they are going to continue to pay divis at a rate of .06 pr unit for the remainder of 2010. They are un hedging their commodity prices to take advantage of better prices when they occur, then locking in some commodities from time to time at better rates. I can tell you hedging sucks. TGA hedged their oil prices and when oil hit $150 a barrel last year, their share price never increased like other oil companies did. It was hedged, they made the same stinkin' amount as they were before. If they hadn't been hedged, they could have made some serious cash on a barrel of oil, and then expanded their drilling at an excelerated rate with the extra dough $$$. I am just using them as an example from experience. Of course it can go the other way as well. If you are buying a commodity for your biz, say you make lithium ion batteries and you are hedged into buying lithium at a certain price with contracts, and the price of lithium goes through the roof, you can make more money as a company if other unhedged companies raise their prices due to their having to in order to turn a profit, so you can raise your prices as well, while still manufacturing for the same price and turning a larger profit, or you can then sell your batteries cheaper, due to your not having to raise prices to compensate for the price increase in lithium. Same goes for the oil industry.
Provident in making a good move here IMHO. I beleive by the end of 2010, they will be able to increase the dividend. If you read this information, it sounds like they are trying to attract more institutional investors, and it sounds like income funds are their target to cater to. The higher the divi, the more attractive they are to income mutual funds.
As far as the high end biz, it seems to me there is a spin off taking place where a new company is being formed and we will get a percentage (larger than the midnight oil shareholders). looks like we will get .12225 units of this new company (NewCo - named this because it is not named yet)and midnight unit holders will get .1.
Looks like midnight is doing a 1 for 10 consolidation of shares just before the new company is formed, a fancy way of saying reverse split (sucks for them).
To me, it is a very good deal for provident unit holders. We are getting 334,000 acres of proven reserves, and that will flow down to the bottom line once developed in the midstream biz, into higher divis. This is looking really good IMHO. Not an overnight play, but over the lond haul I definatly see higher shareprices and higher divis for those that hold over the long haul. I believe provident can turn a very high return. I am curious if the "NewCo" (new company) unit holders will recieve dividends. If so, those that get in prior to this merger, will get double divis on 2 different companies, and the "NewCo' divis will be 100% free for PVX shareholders of today. It will be interesting to see how this develops out in the end over the long haul, as this new propery obtained from midnight is developed and the oil and gas flows.