GDP gets bought out

GDP gets bought out

Postby Fraser921 » Mon Nov 22, 2021 8:41 am

$ 23 per share by major insider, right before things were going to get interesting in 2022.

Lousy 7 % premium means existing shareholders get screwed

New company will be able to refinance 2nd lien debt which is costing them 20 % per year

Goodrich Petroleum Corporation (NYSE American: GDP) ("Goodrich" or the "Company") today announced that it has entered into a definitive merger agreement pursuant to which a subsidiary of Paloma Partners VI Holdings, LLC ("Paloma" and such subsidiary, "Merger Sub"), an affiliate of EnCap Energy Capital Fund XI L.P. ("EnCap"), will commence a tender offer to acquire all of Goodrich's outstanding common shares for $23.00 per share in cash.

The offer price in the transaction, which has been unanimously approved by Goodrich's Board of Directors, represents an approximate 7 percent premium to Goodrich's closing price on November 19, 2021, and a 47 percent premium to its year-to-date volume-weighted average price.
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Re: GDP gets bought out

Postby dan_s » Mon Nov 22, 2021 9:49 am

Darn! I was hoping to get them to host a luncheon for us in December.

It is possible that another Buyer will top the bid, but not likely. My advice is move the money to SBOW or CRK.
Dan Steffens
Energy Prospectus Group
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Re: GDP gets bought out

Postby Fraser921 » Mon Nov 22, 2021 9:54 am

I believe you had a $45 on it, 4 x cash flow

so 23 is about 2 x

I don't own it but I view it is as a screw job to current investors, they get 2 bucks , insiders get the potential of 10 times more
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Re: GDP gets bought out

Postby SergioSays » Mon Nov 22, 2021 3:38 pm

My question is why did existing mgmt except such a lousy premium? Like you say, existing shareholders get hosed.
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Re: GDP gets bought out

Postby dan_s » Mon Nov 22, 2021 4:23 pm

My valuation of $45/share was based on HH gas averaging $4.25/MMBtu in 2022.

Other analysts:
> Neal Dingmann at Truist Financial rated it a Hold on 10/07/21 with a price target of $26.00
> John M. White at Roth Capital rated it a Buy 10/11/21 with a price target of $28.00

Since GDP is a pure play on Haynesville Shale gas the valuation all depends on where you think natural gas prices are heading. Even if you think US natural gas will only average $3.00 after 2021, my valuation would be over $30/share.

There really is nothing stopping another Buyer from topping Paloma's bid. It does happen. When I was at Hess we announced an acquisition that was topped a few days after we announced it.

Unless you have $350 million available, there isn't much you can do but take the sales proceeds and move them to another grossly undervalued company. CRK, SBOW and CTRA are "gassers" with a lot of upside from where they are trading today.

On the oil side, IPOOF and HMENF look grossly under-valued to me. I know both CEOs and they are not interested in selling their companies at today's share price.
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Energy Prospectus Group
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Re: GDP gets bought out

Postby Fraser921 » Mon Nov 22, 2021 6:34 pm

Good advice
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