- Obsidian is offering two Obsidian shares for one Bonterra share.
- Bonterra's shares have consistently traded above twice Obsidian's share price, so it's unlikely the exchange offer will see much traction.
- Obsidian also is unable to increase the offer much without giving up more than 50% of the combined company.
- Consolidation would generally make sense as the combined company would have lower leverage and a lower breakeven point than either standalone companies.
- However, in this case, consolidation would be more likely to happen if Bonterra makes an offer for Obsidian shares.
For further details see:
A Review Of Obsidian Energy's Offer To Bonterra Energy