Takeovers

[mkarpoff]

Once again, in the latest View, you get excited about takeover possibilities. I am anything but. When stocks we have been following for years are so cheap, and are for many of us, underwater, who needs to be taken over for cheap prices with cheap dollars. Noble is a perfect example; 12% premium. Would you invest in the oil patch given its inherent volatility for a 12% gain on a purchase? I wouldn't. Unless these buyouts fetch at least a 50% premium (good luck with that), the transaction does a disservice to many, if not most, of your followers. I know I would be sorely disappointed if TALO, CPE, LONE or PE got taken out for anything less than a a 50% premium, and in LONE's case, much more than that.

[dan_s]

Takeovers draw more attention to the sector which is good. Increased M&A is a sign that the cycle has reversed. Chevron has a lot of smart people working in the business development group. They would not have proposed a $13 Billion deal to management if they didn't think oil prices were going up. NBL shareholders are getting Chevron shares that pay a nice dividend and CVX has a lot of upside from where it is trading today.

Plus, what I say or don't say about takeovers isn't going to change anything.