dud deal, page-2

Dianella you make a valid point re Horizon's continuing need for Roc's cash and stable cash input from its oil production without which HZN's SP might well struggle and consequently suffer.
Unfortunately we may never be able to make your 12 months ahead SP comparisons.

Your "38% back then" changing to the "42% now" that you stated brings an important issue for me to the fore.

You see the 42% we are locked into is in fact only the ratio implied from both companies ASX trading in the period of the previous 10 day VWAP from 23-4-14 back which includes the Easter public holidays period.

I am glad you raise this 42% ratio issue because other astute posters such as Autosime and Danpech have highlighted the many glaring deficiencies in what HZN brings to the merger compared to ROC but no one on HC has pointed out the blatantly unfair and blindingly biased source for arriving at the agreed ratio of 42%:58% approx.
Remember how HZN rose strongly in the days prior to the TH on big volume?

Well if you read Page 1 of the Roc and Horizon Proposed Merger, on 29th April, it states:

Horizon shareholders will receive 0.724 ROC shares for each Horizon share they hold, being the exchange ratio implied by the 10 day VWAP of Horizon and ROC shares ending on 23 April 2014, the last day on which Horizon and ROC shares were traded prior to the announcement of the Merger.
Following completion of the Merger, ROC shareholders will own approximately 42% of the merged company and Horizon shareholders will own approximately 58%.

Blind Freddie can see the SP of HZN rose strongly prior to its closing price of 37c on the 23rd April and the VWAP for 23rd would have been around 36c+ for that day because I recall most of the volume for that day was in the 36-37c range.
Meanwhile Roc's SP over 10 days went the other way opening at 48c, which was the previous day's close, on the 1st day and ending at 45.5c on the 23rd April!
I don't know how to source ASX VWAP data but this trade history below is the relevant HZN 10 day Comsec trade history...
HZN
Date _____Open _High _Low _Close _Volume
23/04/2014 0.340 0.370 0.335 0.370 5,340,314
22/04/2014 0.335 0.340 0.330 0.335 834,948
17/04/2014 0.335 0.340 0.330 0.340 1,413,530
16/04/2014 0.330 0.340 0.330 0.340 1,397,569
15/04/2014 0.335 0.337 0.320 0.330 4,459,097
14/04/2014 0.335 0.350 0.330 0.330 8,465,457
09/04/2014 0.320 0.330 0.320 0.330 1,794,825
08/04/2014 0.315 0.320 0.310 0.315 1,547,005
07/04/2014 0.305 0.315 0.305 0.315 2,602,674
04/04/2014 0.310 0.310 0.300 0.305 3,812,879
Note the 8.5million on the 14thApr with a high of 35c and 4.5 million on 15thApr with a high of 33.75c and that 5.3 million mostly above 36c.

This below is the same or relevant 10day history for ROC but it only takes us back to the 8th April not the 4th April as did HZN's 10day VWAP because HZN above were in TH for two days prior to their Stanley Project ann.

ROC
Date _____Open _High _Low _Close _Volume
23/04/2014 0.460 0.465 0.455 0.455 1,407,582
22/04/2014 0.465 0.470 0.460 0.460 845,018
17/04/2014 0.465 0.470 0.465 0.470 583,977
16/04/2014 0.465 0.470 0.460 0.470 1,044,355
15/04/2014 0.470 0.470 0.460 0.460 879,784
14/04/2014 0.475 0.475 0.460 0.460 452,862
11/04/2014 0.475 0.480 0.465 0.470 414,044
10/04/2014 0.475 0.480 0.470 0.475 318,918
09/04/2014 0.475 0.480 0.470 0.480 904,471
08/04/2014 0.480 0.480 0.460 0.475 1,234,358
Note the fall in SP from a starting 48c to 45.5c finish!

Plus if the merger had been announced two weeks earlier and both parties were to use the 10 day period prior to Roc's current 8thApr 10day starting date above, then the implied ratio would have reflected much more favourably for Roc to state the bleeding obvious.

here are those pre 8th April tables...
HZN first
Date _____Open _High _Low _Close _Volume
07/04/2014 0.305 0.315 0.305 0.315 2,602,674
04/04/2014 0.310 0.310 0.300 0.305 3,812,879
03/04/2014 0.310 0.310 0.305 0.310 1,984,274
02/04/2014 0.305 0.310 0.305 0.310 3,648,832
01/04/2014 0.315 0.315 0.305 0.310 2,264,703
31/03/2014 0.310 0.317 0.300 0.310 2,882,152
28/03/2014 0.310 0.310 0.305 0.305 861,013
27/03/2014 0.320 0.320 0.310 0.310 1,851,554
26/03/2014 0.325 0.325 0.315 0.320 1,791,944
25/03/2014 0.320 0.325 0.315 0.325 1,500,227


Now ROC
Date _____Open _High _Low _Close _Volume
07/04/2014 0.490 0.490 0.475 0.480 685,160
04/04/2014 0.500 0.500 0.485 0.485 1,208,478
03/04/2014 0.495 0.500 0.485 0.500 1,788,652
02/04/2014 0.485 0.490 0.480 0.490 943,572
01/04/2014 0.465 0.480 0.455 0.480 1,443,895
31/03/2014 0.455 0.465 0.455 0.465 974,228
28/03/2014 0.450 0.460 0.447 0.455 892,158
27/03/2014 0.440 0.452 0.440 0.445 937,278
26/03/2014 0.450 0.450 0.440 0.440 808,239
25/03/2014 0.440 0.450 0.430 0.450 1,725,037

So HZN's 58% was calculated on their steeply rising and much higher 10 day recent period and ROC's 42% was calculated on their slightly lower recent period. [although to be fair re ROC's two tables they are approx. the same average SP at face value and only the VWAP data would give us an accurate comparison for the two ROC tables]

Nevertheless and most importantly HZN SP rose strongly during the 10 days prior to 23rd April and ROC's SP fell.
How on earth can that be a fair basis for the proposed merger's implied ratio which ROC shareholders have no vote on?