Carl Icahn “would vote against the company’s proposed acquisition of Bonanza Creek Energy Inc.”
Why? – Shares are undervalued and Bonanza Creek Energy is buying at a low price
The following is the purpose of the transaction.
The Reporting Persons acquired their positions in the Shares in the belief that the Shares were undervalued.
The Reporting Persons have read Fir Tree Partners’ statement setting forth their criticisms of the proposed acquisition of Bonanza Creek Energy and their reasons for intending to vote against it. While the Reporting Persons have not spoken with Fir Tree, they could not be more in agreement with the views expressed in the statement – especially with the assertion that the transaction “reminds us of SandRidge’s prior history when this same management team acquired disparate assets and added leverage with reckless abandon.”
The Reporting Persons obviously also intend to vote against the nonsensical Bonanza transaction. While the Reporting Persons have not spoken with any stockholders of the Issuer, including Fir Tree, they note that news reports indicate other large holders, including Susquehanna Advisors and Cannell Capital, are similarly opposed to the transaction and intend to vote against it.
Representatives of the Reporting Persons attempted today to reach James Bennett, the Chief Executive Officer of the Issuer, and intend to continue to seek to meet with him and his management team soon. The Reporting Persons look forward to hearing what possible justifications management could have for entering into such a seemingly ill-advised, dilutive and value-destructive acquisition and why they believe the transaction is anything more than an entrenchment technique.
The Reporting Persons also intend to have discussions with the Issuer’s board of directors, other stockholders of the Issuer, and other relevant parties as they continue to evaluate the situation. The Reporting Persons are considering all their options and, while they have no present plan to do so, they reserve the right and are considering whether to propose other transactions which relate to or would result in one or more of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, including, without limitation, calling a special meeting of stockholders to seek to remove the Issuer’s board of directors.
The Reporting Persons may, from time to time and at any time: (i) acquire additional Shares and/or other equity, debt, notes, instruments or other securities of the Issuer and/or its affiliates (collectively, “Securities”) in the open market or otherwise; (ii) dispose of any or all of their Securities in the open market or otherwise; or (iii) engage in any hedging or similar transactions with respect to the Securities.
Have a look at the following table:
Icahn never buys to get less than a 10% stock returns.
The upside seems quite significant as the share price is right now $17.50.
The following information is form Yahoo Finance:
- EV/EBITDA: 2.26x
- EV: $512 million
- Profit Margin: 536.12%
- Operating Margin (ttm): 23.38%
- Book Value per share: $25.28
Thus, it has little cash, it is trading below its book value per shares, and it is profitable. Hence, we believe that it is quite undervalued.
This is a stock to follow closely!
————————————————– Attorney ————————————–
DALLAS–(BUSINESS WIRE)–Former United States Securities and Exchange Commission attorney Willie Briscoe is investigating potential claims against the Board of Directors of Bonanza Creek Energy, Inc. (“Bonanza”) (NYSE: BCEI) concerning the merger with SandRidge Energy, Inc. (NYSE: SD). Under the terms of the agreement, valued at approximately $746 million, Bonanza shareholders will only receive $36.00 per share held, comprised of $19.20 per share in cash and $16.80 per share in common shares of SandRidge stock.
If you are an affected investor, and you want to learn more about the investigation or if you have information that you believe would be helpful to our investigation of the fairness of the proposed transaction, contact Willie Briscoe at The Briscoe Law Firm, PLLC via email at firstname.lastname@example.org or by calling (888) 809-2750. There is no cost or fee to you.
The investigation centers on whether Bonanza’s Board of Directors is acting in the shareholders’ best interests, whether the board is properly negotiating a higher share price for the shareholders, and whether the board has employed an adequate process to review and act on the proposed transaction.
The Briscoe Law Firm, PLLC is a full-service business litigation and shareholder rights advocacy firm with more than 20 years of experience in complex litigation matters, including claims of investor and stockholder fraud, shareholder derivative suits, and securities class actions.