We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SilverBow (SBOW) Rejects Kimmeridge's Offer on Undervaluation
Read MoreHide Full Article
SilverBow Resources (SBOW - Free Report) has rejected the latest offer made by its largest shareholder Kimmeridge Energy Management. In its latest offer, Kimmeridge had proposed to acquire the upstream energy player for a total of $2.1 billion, including debt. The offer also mentioned a merger between Kimmeridge’s South Texas gas assets, Kimmeridge Texas Gas (“KTG”) with SilverBow.
The deal gained support from other shareholders of SilverBow Resources. However, the company’s board of directors has urged shareholders to vote against Kimmeridge’s offer in its upcoming 2024 annual meeting of shareholders.
The board has sent out a rather harsh letter to its shareholders, vehemently opposing what they perceive to be “false claims” made by Kimmeridge. The letter stated that Kimmeridge’s offer “substantially undervalues SilverBow”. In addition, SBOW wrote that KTG’s assets are overvalued, and the merger would be advantageous for Kimmeridge at the expense of the former’s other shareholders. The board continues to point toward the importance of conducting due diligence on KTG’s assets.
As part of the deal, Kimmeridge had also requested to nominate three people on the board and pushed for the removal of Leland T. Jourdan. SilverBow’s letter also discussed Kimmeridge’s plan to gain control of the board through successive proxy fights and eventually push for a merger between KTG and SilverBow.
In conclusion, SilverBow turned down Kimmeridge’s offer stating that it undervalued SilverBow to a huge extent and the merger was only aimed at benefiting Kimmeridge by allowing them to gain control of the company without paying a control premium to the rest of the shareholders. SilverBow mentioned that it is open to engage in transactions at an appropriate valuation.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Its current distribution yield is greater than the composite stocks in the industry, providing unitholders with consistent returns.
Helmerich & Payne is primarily involved in the contract drilling of oil and natural gas, with operations in all major U.S. onshore basins as well as in South America, Australia and the Middle East. In the past months, the company has secured eight new rig contracts with Saudi Aramco, thereby expanding its presence in the Middle East. With plans to capitalize on unconventional drilling growth opportunities, HP’s outlook seems positive.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
SilverBow (SBOW) Rejects Kimmeridge's Offer on Undervaluation
SilverBow Resources (SBOW - Free Report) has rejected the latest offer made by its largest shareholder Kimmeridge Energy Management. In its latest offer, Kimmeridge had proposed to acquire the upstream energy player for a total of $2.1 billion, including debt. The offer also mentioned a merger between Kimmeridge’s South Texas gas assets, Kimmeridge Texas Gas (“KTG”) with SilverBow.
The deal gained support from other shareholders of SilverBow Resources. However, the company’s board of directors has urged shareholders to vote against Kimmeridge’s offer in its upcoming 2024 annual meeting of shareholders.
The board has sent out a rather harsh letter to its shareholders, vehemently opposing what they perceive to be “false claims” made by Kimmeridge. The letter stated that Kimmeridge’s offer “substantially undervalues SilverBow”. In addition, SBOW wrote that KTG’s assets are overvalued, and the merger would be advantageous for Kimmeridge at the expense of the former’s other shareholders. The board continues to point toward the importance of conducting due diligence on KTG’s assets.
As part of the deal, Kimmeridge had also requested to nominate three people on the board and pushed for the removal of Leland T. Jourdan. SilverBow’s letter also discussed Kimmeridge’s plan to gain control of the board through successive proxy fights and eventually push for a merger between KTG and SilverBow.
In conclusion, SilverBow turned down Kimmeridge’s offer stating that it undervalued SilverBow to a huge extent and the merger was only aimed at benefiting Kimmeridge by allowing them to gain control of the company without paying a control premium to the rest of the shareholders. SilverBow mentioned that it is open to engage in transactions at an appropriate valuation.
Zacks Rank and Key Picks
Currently, SBOW holds a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy sector are Archrock Inc. (AROC - Free Report) , Sunoco LP (SUN - Free Report) and Helmerich & Payne (HP - Free Report) . Archrock and Sunoco presently sport a Zacks Rank #1 (Strong Buy) each, while Helmerich & Payne carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Its current distribution yield is greater than the composite stocks in the industry, providing unitholders with consistent returns.
Helmerich & Payne is primarily involved in the contract drilling of oil and natural gas, with operations in all major U.S. onshore basins as well as in South America, Australia and the Middle East. In the past months, the company has secured eight new rig contracts with Saudi Aramco, thereby expanding its presence in the Middle East. With plans to capitalize on unconventional drilling growth opportunities, HP’s outlook seems positive.