ERHC Energy Inc (ERHE)

[TOB]

Meaning if a comparable number of ERHE were bought on the open market, not via the Rights Offering

Not possible. The entire rally of 3009 was 304.3 million shares, buys and sales.

So if about half are buys, that is 152.1 million shares, from a low of .10 to a high of .90 in 8 months. The Rally of 2009.

So the only way to place 246 million shares at 0.075 is via an offering at a set price. At market would cause a rally.

Likewise any opportunity for arbitrage is limited to the volume trading above the offering price. I doubt we'll see more than 1% of the amount in buys during the Rights Offering period.

The exception would be a material event that causes a wave of buying. But then who is selling if the share price is in a rally mode?

Also arbitrage selling defeats the purpose of using the Rights Offering to retain an undiluted ownership percentage. It is strictly a swap for a fraction of a penny or so. Maybe even a penny. I see the attraction of this, the math is sound, but how many are after ha'pennies and pennies?

Note I'm not predicting a news event during the Rights Offering subscription period, but it is always possible that a deal could close during that period as several things are in negotiation. It is also possible ERHC will elect to extend the subscription period.

Alternatively some selling may occur because the issued shares are increasing. But it is unlikely to reach 246 million shares.

It is an important development and should be interesting to watch. Both the offering itself and the aftermath.