RJ's Take on MNRL merger with STR - Sept 7

[dan_s]

At the time of this post, MNRL was trading at $27.44.
Raymond James rates it a BUY with a price target of $49.00 (my current valuation is $40.00)

Note below is from John Freeman at Raymond James
"Tuesday morning Brigham Minerals (MNRL) and Sitio Royalties (STR) announced they will
combine the companies in a $4.8B all-stock merger. It was first reported by some news
outlets over a month ago that Brigham was exploring a sale, so the formal announcement
was hardly a surprise. The equity value of the deal is $1.73B, or $28.57/share, and is expected
to close in 1Q23. Brigham's shareholders will receive 1.133 shares of common stock in the
combined company for each share of Brigham stock owned on the closing date, while Sitio
shareholders will receive 1 share in the combined company. Further, Brigham’s class B and
Sitio’s class C shares will receive shares of Class C common stock in the combined company.
After close, Brigham shareholders will own ~46% of the combined entity while Sitio will own
~54%. Sitio management team will run the combined entity post-closing."