Sep. 22 at 8:08 PM
$CRC &
$BRY
As a Berry Corporation shareholder, I find this transaction highly unfair.
Berry has a book value of around
$8.50 per share, yet California Resources is acquiring Berry for only about
$2.67 per share in CRC stock. This means Berry shareholders are forced to sell at a deep discount to book value.
Moreover, Berry’s debts are effectively being transferred to CRC shareholders without CRC putting in real cash — all payment is made in stock. CRC is issuing shares at market price, which is above its own book value, while Berry shareholders lose their margin of safety and are diluted.
This is a great deal for CRC management, but not for Berry investors. We are essentially giving away assets for less than their true worth.
I believe Berry’s board of directors has failed its fiduciary duty to protect shareholders’ value. At the very least, the exchange ratio should reflect fair book value.
Other Berry shareholders should be aware: this deal benefits CRC, not Berry’s owners.
