Topic: Growth Stocks

Stock Pickers Digest Hotline – Friday, February 19, 2016

Article Excerpt

MART RESOURCES, $0.18, symbol MMT on Toronto, has entered into a definitive agreement to sell all shares in the company for $0.25 each to a consortium—Midwestern Oil and Gas Company Ltd., San Leon Energy plc and 1038221 B.C. Ltd. Apart from regulatory and shareholder approvals, the deal is contingent on the consortium arranging financing. This includes $89.2 million, due February 24, 2016, to cover the purchase price. The buyers need another $200.5 million U.S. in financing to pay off Mart’s bank debt. If the group fails to win financing by February 24, the consortium can back out of the agreement (although Mart may extend the deadline). If it does back out, the consortium will be required to pay a break fee to Mart of $2.2 million U.S. Mart is now trading 28% below the takeover price. That reflects considerable uncertainty about whether the consortium will be able to arrange financing. OUR RECOMMENDATION: Whatever the outcome of the takeover offer, we still see…