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Cimarex (XEC)-Cabot Merger Plan Receives Glass Lewis' Support
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Cimarex Energy Co.’s proposed merger deal with Cabot Oil & Gas Corporation recently received support from a proxy advisory firm Glass Lewis, per Reuters. Shareholders of the two upstream companies are expected to take into consideration the influential proxy firm’s advice and vote for the deal.
On Sep 29, shareholders of Cimarex and Cabot are expected to cast their vote on the potential merger deal. As such, Glass Lewis’ recommendation can positively impact their decision while voting. The deal was announced this May and caught investors by surprise. While most of the recent mergers and acquisitions in the upstream spectrum were witnessed between companies with overlapping acreages, the Cimarex-Cabot deal is likely to bring together different shale plays under one E&P portfolio.
Investors, at first, gave a thumbs down to the combination. With no acreage overlap, the strategic rationale behind the amalgamation of Cabot (a natural gas operator in the Appalachian Marcellus shale basin) and Cimarex, which primarily drills for oil in the Permian and Anadarko basins, seemed vague. However, the combination is now slowly but steadily gaining interest. The combined entity is expected to be one of the biggest U.S. shale players, with an increased footprint in major production sites.
The move will likely combine two leading industry operators, and world-class gas and oil facilities to form an upstream giant with a diversified and balanced portfolio, thus creating an opportunity to generate more free cash flow throughout the market cycle and higher returns for investors. It intends to declare and pay out a special dividend of 50 cents per share to all common shareholders shortly after the deal closes. The deal is expected to save $100 million worth of annual costs.
Price Performance
Cimarex has gained 98.8% year to date compared with a 74.5% rise of the industry it belongs to.
The Zacks Consensus Estimate for Devon Energy’s bottom line for 2021 is pegged at $2.78 per share, indicating a massive improvement from the year-ago loss of 9 cents.
The consensus estimate for Comstock Resources’ earnings for 2021 is pegged at $1.10 per share, indicating a major increase from the year-ago figure of 23 cents.
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Cimarex (XEC)-Cabot Merger Plan Receives Glass Lewis' Support
Cimarex Energy Co.’s proposed merger deal with Cabot Oil & Gas Corporation recently received support from a proxy advisory firm Glass Lewis, per Reuters. Shareholders of the two upstream companies are expected to take into consideration the influential proxy firm’s advice and vote for the deal.
On Sep 29, shareholders of Cimarex and Cabot are expected to cast their vote on the potential merger deal. As such, Glass Lewis’ recommendation can positively impact their decision while voting. The deal was announced this May and caught investors by surprise. While most of the recent mergers and acquisitions in the upstream spectrum were witnessed between companies with overlapping acreages, the Cimarex-Cabot deal is likely to bring together different shale plays under one E&P portfolio.
Investors, at first, gave a thumbs down to the combination. With no acreage overlap, the strategic rationale behind the amalgamation of Cabot (a natural gas operator in the Appalachian Marcellus shale basin) and Cimarex, which primarily drills for oil in the Permian and Anadarko basins, seemed vague. However, the combination is now slowly but steadily gaining interest. The combined entity is expected to be one of the biggest U.S. shale players, with an increased footprint in major production sites.
The move will likely combine two leading industry operators, and world-class gas and oil facilities to form an upstream giant with a diversified and balanced portfolio, thus creating an opportunity to generate more free cash flow throughout the market cycle and higher returns for investors. It intends to declare and pay out a special dividend of 50 cents per share to all common shareholders shortly after the deal closes. The deal is expected to save $100 million worth of annual costs.
Price Performance
Cimarex has gained 98.8% year to date compared with a 74.5% rise of the industry it belongs to.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Currently, Cimarex has a Zacks Rank #2 (Buy). Other top-ranked stocks from the energy space include Devon Energy Corporation (DVN - Free Report) and Comstock Resources, Inc. (CRK - Free Report) , each having a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Devon Energy’s bottom line for 2021 is pegged at $2.78 per share, indicating a massive improvement from the year-ago loss of 9 cents.
The consensus estimate for Comstock Resources’ earnings for 2021 is pegged at $1.10 per share, indicating a major increase from the year-ago figure of 23 cents.