Friday, 15 July 2011

BHP acquisition of Petrohawk Energy (NYSE: HK)

Good deal or bad deal?

Given a take-over price of $38.75 per share, I hope that BHP can see considerable potential in Petrohawk because based on current metrics, the deal doesn't look very good to me.

On the face of it, sounds like a great deal for Petrohawk shareholders, with existing value at around $15.36 and current price of $23.49. The BHP offer at $38.75 represents a huge premium over current price.

Is BHP running out of attractive acquisition targets that can pass under the political radar? If this is the case, it is not a great situation for BHP shareholder value.

1 comment:

  1. I like any companies in the energy area. Smaller less know names like Petrohawk Energy have less coverage great for finding that undiscovered stock.