APA buying CPE

[cmm3rd]

Thoughts on this all stock deal? CPE to receive 1.0425 shares of APA per CPE share. Values CPE at $38.31.

[mkarpoff]

I can't say the price impresses me.

[dan_s]

All stock deals are not equal to cash buyouts. For one, they are tax free: "Like Kind Exchanges".

Also, if APA is also undervalued by the market, the CPE shareholders will be getting shares in a much larger company that pays dividends.

[cmm3rd]

Not much of a buyout premium in this deal for those who believe CPE is significantly undervalued.

[dan_s]

Fair deal if you believe APA is also significantly undervalued.

TipRanks: "In the last 3 months, 13 ranked analysts set 12-month price targets for APA. The average price target among the analysts is $46.88. The 13 price targets range from $36 to $60."

Neal Dingmann's price target for APA is $59.

I don't follow APA closely.

[cmm3rd]

I hope Dingman is right. It will be interesting to see what analysts say (am guessing they will be positive and say that APA is getting good assets at a very reasonable price). APA says it is accretive to CFPS and FCF w/ $150 m in synergies/reduced costs of debt. It also increases their % of production in the Permian significantly. Press release said nothing about whether/how this would affect the $1.00 annual dividend, unless I missed it.

Content to wait and see.

[Lbark]

what is disturbing is pxd and cvx deals and now this have no big premiums. i understand that companies like cpe may be looking at being part of bigger companies but it sure does not help our stock portfolios and wonder how PR or others would do in a buyout/merger, et al. Not sure what would motivate buyers to pay a premium . CPE et al obviously dont read your reports on their value. lol

[dan_s]

Stock for Stock deals ARE NOT COMPARABLE to all cash deals. I cannot stress this point enough.

CPE shareholders get stock in a much larger company that has world class assets, cheaper cost of capital and it already pays a dividend.

Compare First Call's price target for APA to their price target for CPE. Lots of analysts believe APA is undervalued and this deal should be viewed by the Wall Street Gang as a positive for APA.

[marc.wolin@yahoo.com]

APA Buying CPE
Disappointed in the price. APA got a steal. Callon was the last good manager. Do we keep it? What are the prospects for APA?
Marc Wolin

[dan_s]

See TipRanks' valuation above.

APA is a much larger company with significant international assets.