Financial Times: Energy billionaire Harold Hamm launches bid to take Continental Resources private
US shale pioneer offers to buy the 17% of the oil group that his family does not already own
It will be interesting to see how close the bids get to my Fair Value Estimate of $117/share.
Continental Resources (CLR) Update - June 14
Continental Resources (CLR) Update - June 14
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Continental Resources (CLR) Update - June 14
More bids expected for Continental Resources: Analyst
Published: June 14, 2022 at 9:37 a.m. ET
Truist Securities analyst Neal Dingmann said Tuesday that the nature of Continental Resources Inc.'s CLR, 13.93% $70-per-share take-private offer from Harold Hamm for the oil and gas company signals that the company's board is open to other bids. "The offer is not binding and the board plans to evaluate the offer before moving forward, which we expect is an intentional strategy to potentially open the doors to competing bids from large cap public peers," Dingman said. He said the company is worth at least his target price of $95 a share. Continental Resources shares soared 14% to $73.64 in early trades on Tuesday as investors bet that the company is worth more than the buyout price of $70 a share.
TipRanks: "Stifel Nicolaus analyst Derrick Whitfield maintained a Buy rating on Continental Resources (CLR) on June 3 and set a price target of $107.00."
Published: June 14, 2022 at 9:37 a.m. ET
Truist Securities analyst Neal Dingmann said Tuesday that the nature of Continental Resources Inc.'s CLR, 13.93% $70-per-share take-private offer from Harold Hamm for the oil and gas company signals that the company's board is open to other bids. "The offer is not binding and the board plans to evaluate the offer before moving forward, which we expect is an intentional strategy to potentially open the doors to competing bids from large cap public peers," Dingman said. He said the company is worth at least his target price of $95 a share. Continental Resources shares soared 14% to $73.64 in early trades on Tuesday as investors bet that the company is worth more than the buyout price of $70 a share.
TipRanks: "Stifel Nicolaus analyst Derrick Whitfield maintained a Buy rating on Continental Resources (CLR) on June 3 and set a price target of $107.00."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Continental Resources (CLR) Update - June 14
Take under
It was 70 last week. Jeez!
He is the bod
He’s already got 300/369 m shares
It was 70 last week. Jeez!
He is the bod
He’s already got 300/369 m shares
Re: Continental Resources (CLR) Update - June 14
Note from Stifel this morning.
Continental Resources, Inc. (CLR, $74.22, Hold; Target $70.00)
Downgrading CLR to Hold following $70.00/sh take-private offer from Hamm Family - Derrick Whitfield
We are downgrading CLR to Hold from Buy following the Board's receipt of a non-binding, take private proposal letter from Harold Hamm to acquire for cash all outstanding shares of common stock other than shares already owned by the Hamm Family, who collectively owns ~83% of total shares outstanding, for $70.00/share. The offer price represents a 9% premium over CLR's closing price on June 13, 2022, an 11% premium to the VWAP during the past 30 days and a 21% premium to the VWAP during 2022. The Board intends to establish a special committee of independent directors to consider the proposal and expects to retain independent advisors to assist with the process. We believe the transaction goes through as the offer price represents a reasonable premium to the recent trading price of the stock and at a price the stock has only closed above eight times since 2015
Continental Resources, Inc. (CLR, $74.22, Hold; Target $70.00)
Downgrading CLR to Hold following $70.00/sh take-private offer from Hamm Family - Derrick Whitfield
We are downgrading CLR to Hold from Buy following the Board's receipt of a non-binding, take private proposal letter from Harold Hamm to acquire for cash all outstanding shares of common stock other than shares already owned by the Hamm Family, who collectively owns ~83% of total shares outstanding, for $70.00/share. The offer price represents a 9% premium over CLR's closing price on June 13, 2022, an 11% premium to the VWAP during the past 30 days and a 21% premium to the VWAP during 2022. The Board intends to establish a special committee of independent directors to consider the proposal and expects to retain independent advisors to assist with the process. We believe the transaction goes through as the offer price represents a reasonable premium to the recent trading price of the stock and at a price the stock has only closed above eight times since 2015
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Continental Resources (CLR) Update - June 14
Bloomberg
Shale Mogul Hamm Could Trigger Bidding War for Continental
Billionaire Harold Hamm may trigger a bidding war for Continental Resources Inc. with his $4.3 billion takeover offer for the shale powerhouse he founded.
The Hamm family’s all-cash, $70-per-share offer for the 17% of the company it doesn’t already own will be evaluated by a special committee formed by the board of directors, Continental said in a statement Tuesday.
The shares traded above that price, rising 13% to $72.93 at 1:14 p.m. in New York, indicating investors see a higher bid emerging. Hamm’s take-private proposal may be intended to attract rival suitors, according to Truist Securities.
“We would not be surprised if a process ultimately resulted in a sale given our forecast that the company is worth at least our $95/share price target,” Neal Dingmann, an analyst at Truist, wrote in a note to investors.
After being pummeled during the worst of the Covid-19 pandemic and a plunge in global crude demand in 2020, Continental and other shale drillers have staged a strong recovery on the back of a dramatic rally in oil and natural gas prices. They have also largely resisted increasing output, even as President Joe Biden urges more drilling to combat energy inflation.
Energy equities have outperformed the rest of the stock market this year. But although Continental has surged more than 80% in the 12 months leading up to Hamm’s offer, the 76-year-old wildcatter said the diminishing number of listed US drillers evinced a “lack of support from the public market.”
“We have consistently said that as long as we were appreciated in the market, we would remain a public company, but if our opportunities were limited by being public, we should look at alternatives,” Hamm said in a message to employees that was included in a filing on Tuesday. “We have determined that the opportunity today is with private companies who have the freedom to operate and aren’t limited by public markets.”
Hamm, the youngest of 13 children born to poor Oklahoma sharecroppers, started in the energy industry at the age of 18 with an oilfield- services business he funded with a $1,000 loan. Continental helped pioneer the shale-oil boom and debuted as a publicly traded company in 2007. Hamm’s net worth is $19.7 billion, according to the Bloomberg Billionaires Index.
Hamm was one of the first people to see the opportunities in horizontal drilling and hydraulic fracturing in the Bakken shale region of North Dakota and Montana. More recently, he’s expanded into the Permian Basin of West Texas as well as Wyoming’s Powder River Basin.
In April, Continental raised its 2022 drilling budget by about 15% to $2.65 billion and hiked its crude production target by 2.5%. The company also boosted dividends by 22%.
Hamm has taken steps this year to secure his legacy. In February, he handed each of his five children stakes in the company which at the time were valued at about $2.3 billion. Despite the transfers, which were largely tax-free, Hamm said that he retained control because his children can’t sell the shares until he dies.
Continental “has always been closely held and consummating a full take-private has been mentioned previously as a viable alternative and is not fully surprising,” David Deckelbaum, an analyst at Cowen, wrote in a note to clients.
The family’s offer represents an 8.5% premium to Monday’s closing price. A higher offer will probably be needed for shareholder approval given the “current elevated commodity price environment,” Scott Hanold, an analyst at RBC Capital Markets, wrote in a note.
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IMO CLR is worth $107/share.
Shale Mogul Hamm Could Trigger Bidding War for Continental
Billionaire Harold Hamm may trigger a bidding war for Continental Resources Inc. with his $4.3 billion takeover offer for the shale powerhouse he founded.
The Hamm family’s all-cash, $70-per-share offer for the 17% of the company it doesn’t already own will be evaluated by a special committee formed by the board of directors, Continental said in a statement Tuesday.
The shares traded above that price, rising 13% to $72.93 at 1:14 p.m. in New York, indicating investors see a higher bid emerging. Hamm’s take-private proposal may be intended to attract rival suitors, according to Truist Securities.
“We would not be surprised if a process ultimately resulted in a sale given our forecast that the company is worth at least our $95/share price target,” Neal Dingmann, an analyst at Truist, wrote in a note to investors.
After being pummeled during the worst of the Covid-19 pandemic and a plunge in global crude demand in 2020, Continental and other shale drillers have staged a strong recovery on the back of a dramatic rally in oil and natural gas prices. They have also largely resisted increasing output, even as President Joe Biden urges more drilling to combat energy inflation.
Energy equities have outperformed the rest of the stock market this year. But although Continental has surged more than 80% in the 12 months leading up to Hamm’s offer, the 76-year-old wildcatter said the diminishing number of listed US drillers evinced a “lack of support from the public market.”
“We have consistently said that as long as we were appreciated in the market, we would remain a public company, but if our opportunities were limited by being public, we should look at alternatives,” Hamm said in a message to employees that was included in a filing on Tuesday. “We have determined that the opportunity today is with private companies who have the freedom to operate and aren’t limited by public markets.”
Hamm, the youngest of 13 children born to poor Oklahoma sharecroppers, started in the energy industry at the age of 18 with an oilfield- services business he funded with a $1,000 loan. Continental helped pioneer the shale-oil boom and debuted as a publicly traded company in 2007. Hamm’s net worth is $19.7 billion, according to the Bloomberg Billionaires Index.
Hamm was one of the first people to see the opportunities in horizontal drilling and hydraulic fracturing in the Bakken shale region of North Dakota and Montana. More recently, he’s expanded into the Permian Basin of West Texas as well as Wyoming’s Powder River Basin.
In April, Continental raised its 2022 drilling budget by about 15% to $2.65 billion and hiked its crude production target by 2.5%. The company also boosted dividends by 22%.
Hamm has taken steps this year to secure his legacy. In February, he handed each of his five children stakes in the company which at the time were valued at about $2.3 billion. Despite the transfers, which were largely tax-free, Hamm said that he retained control because his children can’t sell the shares until he dies.
Continental “has always been closely held and consummating a full take-private has been mentioned previously as a viable alternative and is not fully surprising,” David Deckelbaum, an analyst at Cowen, wrote in a note to clients.
The family’s offer represents an 8.5% premium to Monday’s closing price. A higher offer will probably be needed for shareholder approval given the “current elevated commodity price environment,” Scott Hanold, an analyst at RBC Capital Markets, wrote in a note.
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IMO CLR is worth $107/share.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Continental Resources (CLR) Update - June 14
So its worth > 100
How the hell does he pull this off?
The sum of the various basins are clearly worth > 100
Are the independent directors really going to say your offer is too low?
Who might want this thing?
Eog?
PXD?
OXY? There's tons of overlaps
Refiner?
How the hell does he pull this off?
The sum of the various basins are clearly worth > 100
Are the independent directors really going to say your offer is too low?
Who might want this thing?
Eog?
PXD?
OXY? There's tons of overlaps
Refiner?
Re: Continental Resources (CLR) Update - June 14
100% of CLR should have a fair value of $34 to $38 billion IMO, but few companies have that kind of cash.
Some large private equity firms might want to take control and keep it public.
If other parties decide they want to make a bid, the board will have to give them time for their due diligence. If several interest parties with the ability to make a deal of this size express interest, this sales process will take months.
CLR will be stuck in the low $70s until the "Bidding War" starts.
I doubt that PXD will be interested. A merger with CTRA would be interesting because the Cimarex guys know West Texas & Oklahoma. In the "Good Old Days", Hess would have been interested.
Some large private equity firms might want to take control and keep it public.
If other parties decide they want to make a bid, the board will have to give them time for their due diligence. If several interest parties with the ability to make a deal of this size express interest, this sales process will take months.
CLR will be stuck in the low $70s until the "Bidding War" starts.
I doubt that PXD will be interested. A merger with CTRA would be interesting because the Cimarex guys know West Texas & Oklahoma. In the "Good Old Days", Hess would have been interested.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Continental Resources (CLR) Update - June 14
Hamm recently did some estate planning diving up his shares with his children.
He is getting older. A better take out offer , I believe , has to be tax efficient so , that excludes 100 % cash from somebody, so shares for shares.
His offer is only for the shares he doesn't already own so it doesn't trigger a tax liability on the 300 m shares he does own
He probably be ok with a offer of shares which is tax free.
Oxy has overlaps and has Warren Buffet as a supporter, their ev is about 90. 90 swallowing 36 b should be doable
EOG and DVN might be interested
What's the probability someone will emerge?
Worst case he takes it private and move the offer 10 bucks
He is getting older. A better take out offer , I believe , has to be tax efficient so , that excludes 100 % cash from somebody, so shares for shares.
His offer is only for the shares he doesn't already own so it doesn't trigger a tax liability on the 300 m shares he does own
He probably be ok with a offer of shares which is tax free.
Oxy has overlaps and has Warren Buffet as a supporter, their ev is about 90. 90 swallowing 36 b should be doable
EOG and DVN might be interested
What's the probability someone will emerge?
Worst case he takes it private and move the offer 10 bucks
Re: Continental Resources (CLR) Update - June 14
The fact that none of their oil is hedged is also very attractive to any buyer.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group