4 More Possible Energy Buyouts

Posted by Turn Key Oil on May 5, 2011 · 5 Comments

When looking at your portfolio and the stock you hold, you try to predict the future as much as possible. This, as we all know, can be nearly impossible at times. This being said, keeping up with current events of the companies you hold stock in is vital. Finding out about possible buyout is definitely something that could effect your choices on investing in a company or not. Here are four companies that could possibly be looking at buyouts, and quite honestly, they are pretty good candidates for it.

EXCO Resources (XCO)
With the current stock price trading above the buyout price, the directors are in a difficult decision. Without a higher bid from Miller’s group, it would be hard for them to accept a buyout. On the other hand, if the deal falls through, they will likely have to look for a new CEO to replace Miller. The daunting prospect of replacing a CEO who has held the position since 1997 may give the directors a bias towards selling the company, even if it is only marginally above the current market price.

Conoco Phillips (COP)
The biggest impediment to a sale may be the company’s size. While the CEO has recently discussed asset sales of non-core operations, these are expected to be modest sales. There is always the possibility of breaking the company up. While there has been no indication of interest, Berkshire Hathaway (BRK.A) owns nearly $2 billion of COP stock. If oil prices decline meaningfully, Buffett may bring out his elephant gun.

Range Resources (RRC)

The directors and executive group own 3,288,078 shares, worth around $175 million. In addition, CEO John Pinkerton stands to gain more than $11.455 million in potential change of control payment. The other top executives stand to gain $20.35 million in change of control payments.

PetroHawk Energy (HK)
PetroHawk Energy insiders have meaningful stock holdings. The directors own a total of 8,279,264 shares and as such, Chairman of the Board and CEO Floyd Wilson and the other directors have strong incentive to negotiate a sale of PetroHawk Energy…

…In addition to management’s economic incentive, PetroHawk could have an additional catalyst with the recent disclosure that a Soroban Capital Partners purchased a 5.4% stake in the company. What’s more significant is that the stake could represent as much as one third of the fund’s assets. While this position could very well be passive in nature, at the very least, it sends a signal to management that investors are watching.

Keep an eye on these companies. If they end up being bought out, there could be big company changes on the horizon. Be those changes good or bad, they are changes all the same, and it could possibly effect your stock holdings.

Reported by Naked Value, Read the entire article here.

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