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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Owners of PVR Partners would get 1.02 shares of Regency Energy Partners in the buyout, and a total of about $40 million in cash. That was a premium of about 26% to yesterday's close, but Regency Energy Partners is down 10% today, so the value of the offer has become less attractive overnight.
Now what: Consolidation is commonplace in the pipeline business these days, so the buyout itself isn't surprising. What may face a challenge is the price, given the fact that PVR owners are only getting a 10% premium after Regency's drop. I don't think this is the time to sell PVR, just in case the offer increases. The worst-case scenario is that the buyout falls through, and we're back to where we were yesterday.
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