Chevron is buying PDCE

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Fraser921
Posts: 3102
Joined: Mon Mar 22, 2021 11:48 am

Chevron is buying PDCE

Post by Fraser921 »

https://seekingalpha.com/news/3973745-chevron-to-buy-pdc-energy-in-72share-deal

Low acquisition price, Dan had $ 103 TP..

Dan your models need to be adjusted for actual comps. That TP of $ 103 is 43 % higher than agreed takeover price. All TP should be 30 % lower, if that is a fair price.
Fraser921
Posts: 3102
Joined: Mon Mar 22, 2021 11:48 am

Re: Chevron is buying PDCE

Post by Fraser921 »

Fintwit not happy with price

https://seekingalpha.com/news/3973830-chevrons-pdc-energy-deal-a-surprise-may-see-regulatory-scrutiny-analyst

Chevron's (NYSE:CVX) announced $72 a share all-stock deal for PDC Energy (NASDAQ:PDCE) is surprising news and it may see scrutiny from antitrust regulators, according to KeyBanc.

It's surprising that PDC Energy (PDCE) agree to sell at just an 11% premium vs. growing the company though acquisition, KeyBanc analyst Tim Rezvan wrote in a note on Monday.

"The modest premium and timing are surprising to us," Rezvan wrote. "We had questions about PDC Energy's inventory depth and ability to accelerate activity, but did not view the situation as dire."

The Federal Trade Commission is likely to do a deep look at the transaction as the list of "significant" operators in the DJ Basin drops to three from four with the deal and will include Chevron (CVX), Occidental (OXY) and Civitas (CIVI). Rezvan highlighted that the FTC recently was involved in a private transaction in Utah's Uinta Basin and ordered an EnCap fund to sell interests in Utah to maintain competition in a local refinery. The regulator is also involved in EQT's planned purchase of Appalachia operator Tug Hill.

Rumors of a higher bid and FTC objection
Fraser921
Posts: 3102
Joined: Mon Mar 22, 2021 11:48 am

Re: Chevron is buying PDCE

Post by Fraser921 »

Wild card here is FTC

Downside risks

They aren't approving a damn thing

Bullish possibilities

higher offer
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