Q: Are there any companies who would find SGY assets interesting enough to acquire or are they just to small.
Thank you,
Mike
Thank you,
Mike
5i Research Answer:
SGY is quite small at $510M, but the stock is very cheap. With a 10% dividend, a buyer (or privatization) could eliminate the dividend and use internal cash flow to pay for the whole company in about three years. But, that doesn't mean it will happen. Takeovers in the sector typically need to be friendly and we highly doubt management would want to sell out anywhere near the current price plus a premium. WCP, TVE might take a look. We would see a merger or a privatization as more likely than a takeover, but would not bet on this possibility.