Petro Uno Resources Ltd. (CVE:PUP) (PINK:PNFOF) price went flat after news came out, stating the company will be acquired by Renegade Petroleum Ltd.
The acquisition is yet to be approved by the majority of shareholders in a meeting that will take place in April 2011. Court and regulatory approvals will also have to be acquired. Shareholders will get 0.2 common share of Renegade per one Petro share. The exact price of acquisition was not disclosed.
The filed plan of arrangement defines up to $1.75 million termination fee, in case the deal was canceled by Renegade.
The large trading volume on Wednesday, accompanied by virtually no change in stock price, points out share redistribution has taken place. Follow-up might result in a mass of traders getting out of their positions at lower prices, thus creating a price collapse.
The company is worth $8 million on paper, and the market cap is currently 4 times this valuation. A specific price offer from Renegade could have a large influence on the stock price, which currently appears at least slightly inflated.
Preceding uptrend and supports at 80 and 75 cents should help to sustain the price higher while waiting for the shareholders approval to business changes.
