Continental Resources Gains on Hamm Takeover Bid, Which is Seen as Too Low
2022.06.14 18:26
Continental Resources (CLR) Gains on Hamm Takeover Bid, Which Is Seen as Too Low
By Sam Boughedda
Continental Resources’ (NYSE:CLR) stock rallied Tuesday after it was revealed the oil and natural gas producer has received a $70 per share “take private” bid from Chairman Harold Hamm, the company’s founder and his family.
The businessman and his family already own approximately 83% of the company’s outstanding stock. The $70 per share offer represents around a 9% premium over Continental’s closing price on June 13.
Following the news, RBC Capital analyst Scott Hanold said, “they think it will take a higher price for existing shareholders, especially in the current elevated commodity price environment.”
“The average consensus price target is $78-79/share. We forecast CLR’s FCF generation at $6.5 billion over the next 18 months, which is above the $4.3 billion needed to fund at the offer price,” the analyst wrote.
Meanwhile, Smead Capital, the largest Continental Resources shareholder after the Hamm Family, reacted to the news, stating they believe the offer “undervalues” the shale producer.
