Seitel Gets Acquisition Offer

This morning ValueAct Capital offered $3.65 per share for all the outstanding shares of Seitel (SELA.ob). Given that the stock was pretty recently trading at nearly $5 per share, and given the fact that Seitel still has excellent growth opportunities ahead, we believe that the ValueAct offer is ludicrously low, and we encourage investors in Seitel (SELA.ob) to hold onto their shares. We think it is likely that other institutional holders of Seitel will press for a higher price. We can't imagine any long-time investors in Seitel are pleased with this offer. Incidentally, this is the second seismic acquisition this year, and we expect some more as the year progresses. Importantly, the valuation afforded to Seitel in this latest offer shows quite clearly how significantly undervalued Pulse Data (PSD.TO) really is.

Note: We first recommended Seitel (SELA.ob) to our subscribers at about $2.05 per share. We still own shares in the stock. In addition, this report includes market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets or in any particular stock. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. Yehuda Fruchter maintains no legal responsibility to update this report or his holdings in the stock mentioned in this report.

Comments

[Adrien]

I found your blog AFTER i invested in both PGS and Seitel and i must say that i have invested in them for the same reasons you highlighted. I took comfort in Gould's speech regarding seismic early 2006 and he reiterated a similar view two days ago at the lehmann conference> one of his slides said about a year in review "seismic activity up dramatically with even higher growth to come". The Veritas deal at a high multiple is also quite encouraging. What are your current views on PGS and SEitel? What do you think would be a fair price for Seitel? 6/7? Good job on your blog. Well written and informative.
AFDL