What To Do With Petrofund

Article Excerpt

PETROFUND ENERGY TRUST $27.94 (Toronto symbol PTF.UN; SI Rating: Speculative) is now the subject of a takeover bid by Penn West Energy Trust $44.30, symbol PWT.UN on Toronto. Petrofund unitholders will receive 0.6 of a Penn West unit (with a current value of $26.58), as well as 0.12 of a junior exploration company (worth about $0.36) made up of certain assets contributed by both Petrofund and Penn West. Petrofund unitholders will also receive a special distribution of $1.00 per unit. The exchange of units will be tax-free for Petrofund unitholders, until they sell their Penn West units. The combined entity will be the largest conventional oil and gas trust in North America. The combined company would appear to have attractive long-term prospects. However, it may take it a while to fully integrate the Petrofund assets. Petrofund unitholders should exchange their units for Penn West units. units…