I have to wade in here. I buy many flow throughs (I am not talking about flow through funds but private placements by resource companies). I (and others) will generally not pay more than a 15 to 20% premium, since if you pay more than this it starts to negate the tax advantage of the flow through, and frankly why wouldn't you just wait for another flow through with a smaller premium to come along.

My guess is that the reason that this deal was done, is that the buyer knew that they could not get a large block of PRB shares at $1.14 and were willing to pay a 75% premium. In other words they wanted to own PRB shares not just any resource company. The flow through tax aspect of the purchase just helped the economics.

So why BMO? I was also pissed off when BMO came out with their first report after the last large deal, and frankly wouldn't have expected them to be in another syndicate never mind leading a syndicate. My guess is that BMO had the relationship with the buyer(s), approached PRB on a bought deal basis (not easy for a company the size of PRB to pull this off) and PRB had a choice of taking the deal, or letting it die on the vine.

If you are in this stock for the long term, the fact that they now have even more cash is the main piece of news, not if someone may sell their FT shares in 4 months after the lock up.

JMHO.